KEY POINTS
- GenCos deny reaching a final deal on the OPay 10-year scholarship programme.
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Federal Government’s claim of a finalised debt plan questioned by operators.
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GenCos demand clarity on verification and payment timelines.
Power generation companies have dismissed claims by the Federal Government that a payment framework for the N4tn power sector debt has been concluded, saying discussions are still in progress.
Federal claims of finalised debt plan questioned
The operators, represented by the Association of Power Generation Companies (APGC), confirmed that while meetings were held with senior government officials, no concrete decisions have been reached on the modalities for settling the outstanding obligations.
Dr. Joy Ogaji, Chief Executive Officer of the APGC, said the association’s members met with top government representatives, including officials from the Ministry of Finance and the Ministry of Power, to review possible settlement options. “Yes, the chairmen were invited to discuss modalities. Discussions are ongoing. Nothing is finalised or concretised yet,” Ogaji saisd, clarifying that no agreement has been signed.
Her comments counter an earlier statement by the President’s Special Adviser on Energy, Olu Verheijen, who had announced that the government had finalised the implementation framework for the Presidential Power Sector Debt Reduction Plan. She described the initiative, approved by President Bola Tinubu, as a key step toward restoring financial stability and investor confidence in the electricity market.
N4tn power sector debt discussions continue
The Federal Government had previously approved a N4tn bond to clear legacy debts owed to power producers and gas suppliers. According to Verheijen, the plan, endorsed by the Federal Executive Council in August 2025, authorises the issuance of government-backed bonds to settle verified arrears that have long constrained investment and weakened utility balance sheets.
However, Ogaji insisted that generation companies were not adequately involved in the verification process handled by the Nigerian Bulk Electricity Trading Plc. She had earlier written to NBET seeking clarification on the criteria used in verifying the debt.
During the October 7 meeting with top industry executives, government officials, including the Finance Minister Wale Edun and Power Minister Adebayo Adelabu, agreed on the need for bilateral negotiations to define final settlement terms that balance fiscal realities with the financial distress of the GenCos.
Operators warn of worsening liquidity strain
Despite assurances, operators remain sceptical. According to Punch, Ogaji warned that many GenCos are struggling to sustain operations as payment delays continue to strain liquidity. The firms’ monthly invoices average N270bn, but they only pay about N70bn, leaving N200bn outstanding each month, according to her.
She added that gas suppliers have started cutting supply, while maintenance and spare parts procurement are becoming increasingly difficult. “Our creditors are no longer willing to wait. They now prioritise those who pay promptly,” she said.
The APGC chief described the 2025 federal budget allocation of N900bn for the power sector as inadequate without firm cash backing. She stressed that unless payment timelines are defined, the N4tn power sector debt may continue to undermine generation capacity and investor confidence.
