President Bola Tinubu on Friday stepped into Nigeria’s long-standing electricity sector crisis, pledging to verify and address a staggering ₦4 trillion debt owed to electricity generation companies (GENCOs). Meeting with key stakeholders from the Association of Power Generation Companies at the Aso Rock Presidential Villa, Tinubu appealed for more time to validate the claims, while offering anticipatory approval for a ₦4tn bond programme aimed at closing the sector’s gaping liquidity deficit.
The President emphasized that his administration is committed to honoring liabilities inherited from past governments, but stressed that payments must be based on a transparent, audited process. “I accept the assets and liabilities of my predecessors… but that acceptance must be on credible grounds,” Tinubu stated. He reassured GENCOs that his administration is not merely deferring the crisis but working actively to build “a support structure for critical economic and industrial promotion.”
A Sector Choked by Debt and Unpaid Subsidies
The meeting was a critical intervention in a sector long plagued by chronic under-recovery of tariffs, gas supply issues, weak transmission networks, and widespread energy theft. Since the 2013 privatisation of generation and distribution assets, the Nigerian Bulk Electricity Trading Company has routinely paid GENCOs only a fraction of their invoices, forcing them to rely on expensive short-term loans from commercial banks to stay afloat.
Olu Verheijen, Special Adviser to the President on Energy, revealed that as of April 2025, the Federal Government’s verified debt exposure to GENCOs stood at ₦4tn, with ₦1.8tn already validated. “We have sat with 27 GENCOs and reviewed their PPAs and gas sales agreements,” she said, adding that the figure could still be revised downward after final validation. Verheijen made it clear that only claims proven legitimate would be included in the debt instruments to be issued by the Debt Management Office.
Reform Milestones and President Tinubu Commitment
Minister of Power, Adebayo Adelabu, praised President Tinubu’s proactive leadership, noting that recent reforms had begun reversing the sector’s fortunes. These include the signing of the Electricity Act 2023, the launch of the first Integrated National Electricity Policy in 24 years, and the attraction of over $2 billion in private sector investment. Annual revenue in the power sector has grown by 70%—from ₦1tn in 2023 to ₦1.7tn in 2024—significantly reducing subsidy obligations.
Adelabu reported several record-breaking achievements: generation capacity has increased to 14,000 MW, with a peak daily delivery of 120,370 MWh recorded in March 2025. Moreover, Nigeria has experienced zero grid collapses in 2025 due to transmission upgrades under the Presidential Power Initiative. “Your Excellency, your presence here is a clear testament to your unwavering commitment,” the minister said, while cautioning that the liquidity crisis, if unresolved, could derail all progress.
Banks Warned Against Foreclosures as Industry Leaders Cry Out
President Tinubu issued a stern appeal to banks to delay any foreclosure plans against indebted GENCOs, urging them to show flexibility while the government verifies the debts. “Sharpen your pencils, but keep an eraser handy,” he advised lenders. The call came amid fears that mass foreclosures could ripple across the value chain, threatening generation capacity and investor confidence.
Business magnates Tony Elumelu and Kola Adesina used the occasion to make passionate pleas. Elumelu warned of imminent collapse in power generation due to crippling bank debts. “We’ve come to you as a last hope… we don’t need power to complete your transformation; we need power to enable it,” he told the President. Adesina highlighted the urgent need for liquidity and gas supply, proposing the release of 800 million cubic feet of gas through NLNG to revive underperforming plants in the Afam axis.
A Calculated but Cautious Path to Energy Stability
While Tinubu has demonstrated bold resolve in addressing the sector’s foundational challenges, his call for patience underscores the complexities involved. The N4tn bond programme, although approved in principle, will be subject to final negotiations and validation of claims. Only debts proven to be government obligations will make it into the bond issuance, ensuring that fiscal prudence is not sacrificed in the name of political expediency.
Attending the meeting were the President’s Chief of Staff, Femi Gbajabiamila; Finance Minister Wale Edun; Information Minister Mohammed Idris; and other senior officials, reflecting the high-level attention now focused on untying the sector’s decade-old financial knot. As Tinubu noted, electricity remains “the most important discovery of humanity in the last 1,000 years,” and unlocking its full potential is vital for Nigeria’s industrial and human development ambitions.
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