President Tinubu Appeals for Patience as Government Verifies ₦4 Trillion Power Sector Debts

Abuja, Nigeria – President Bola Tinubu has called on power generation companies (GENCOs) to allow more time for the federal government to complete verification processes for longstanding sector debts estimated at ₦4 trillion. The appeal came during a high-level meeting at the Presidential Villa on Friday.

Government Commits to Resolving Power Sector Liquidity Crisis

Meeting with executives from the Association of Power Generation Companies, led by retired Colonel Sani Bello, President Tinubu acknowledged the inherited liabilities while emphasizing the need for thorough validation. “I accept the assets and liabilities of my predecessors, but that acceptance must be on credible grounds,” the President stated.

Special Adviser on Energy Olu Verheijen revealed that President Tinubu has granted anticipatory approval for a ₦4 trillion bond program to address the sector’s liquidity shortfall. However, she noted the final amount remains subject to verification.

Decade-Long Debt Accumulation

The power sector’s financial challenges stem from unfunded tariff shortfalls dating back to 2015. Verheijen explained that while GENCOs claim ₦4 trillion in debts, the Nigerian Bulk Electricity Trading Company has so far validated ₦1.8 trillion of these claims.

“As of April 2025, the total exposure we’re carrying is ₦4 trillion,” Verheijen said, adding that ₦200 billion in unfunded subsidies have compounded the problem since 2023.

Market-Driven Approach with Safeguards

President Tinubu reaffirmed his administration’s commitment to a market-driven electricity sector while calling for restraint from financial institutions. “To our friends in the banking sector, I ask that we avoid foreclosures. Sharpen your pencils, but keep an eraser handy,” he urged.

The President described electricity as “the most important discovery of humanity in the last 1,000 years,” emphasizing its fundamental role in economic growth and human dignity.

Power Sector Reforms Show Progress

Power Minister Adebayo Adelabu highlighted significant achievements under the Tinubu administration:

• Enactment of the Electricity Act 2023 decentralizing the power market
• 70% increase in sector revenue (₦1 trillion to ₦1.7 trillion)
• Reduction of government subsidies by over ₦700 billion
• Growth in installed capacity from 13,000MW to 14,000MW
• No national grid collapses in 2025

Despite these gains, Adelabu warned that the liquidity crisis threatens sustainability, appealing for partial debt repayment to prevent generation shutdowns.

Private Sector Appeals for Urgent Action

Business leaders Tony Elumelu and Kola Adesina emphasized the critical need for intervention. “The generating companies are heavily indebted to banks, and foreclosure threats are real,” Elumelu stated, while praising the administration’s progress in oil production stability.

Adesina highlighted gas supply challenges, proposing to unlock 800 million cubic feet through NLNG to boost power plant operations. “Liquidity is the oxygen of our business,” he stressed.

Path Forward

The meeting concluded with commitments to continue sector reforms while addressing the debt overhang. Government officials emphasized that only validated debts would be included in the bond issuance by the Debt Management Office.

The high-level discussion included the Chief of Staff, Finance Minister, Information Minister, and key electricity sector stakeholders, signaling the administration’s prioritization of power sector stability.

Credit: Bayo Onanuga, Special Adviser to the President (Information & Strategy). For more details, visit the original source.