FG pays N1.23trn of GenCos’ legacy debts, targets full settlement in 2027

The Federal Government has paid about N1.23 trillion of legacy debts owed to power generation companies (GenCos) and plans to settle the outstanding balance in 2027.

The Minister of Power, Joseph Tegbe, disclosed this at the Harvard Business School Association of Nigeria (HBSAN) Energy Conference in Lagos, reaffirming the government’s commitment to improving electricity supply and strengthening the power sector’s financial stability.

He said the payments, facilitated through bonds, were part of efforts to settle longstanding obligations to GenCos and restore confidence across the electricity value chain.

Tegbe said the government was also working to prevent the accumulation of fresh arrears, noting that a more stable financial environment was necessary to attract investment into the sector.

Nigeria’s electricity industry has continued to face liquidity challenges, with outstanding payments affecting market participants and limiting the sector’s capacity to attract the investment needed to improve power supply.

The minister said the government’s objective was to ensure that available electricity generation capacity translated into more reliable supply for households, businesses and industries.

He added that the administration remained committed to protecting vulnerable consumers while implementing reforms to improve the sector’s performance and financial sustainability.

Settling the outstanding GenCos’ debts is expected to ease some of the financial pressure on power generation companies. However, improvements in electricity supply will also depend on addressing other challenges across the power value chain.

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Tegbe said the government intended to build a more dependable electricity sector capable of supporting economic growth while preventing new arrears from accumulating.

The planned completion of the legacy debt payments in 2027 is a key part of the government’s efforts to improve financial certainty for generation companies and create better conditions for future investment.

The effect on electricity supply will depend on the government’s ability to sustain timely payments, prevent fresh debts and ensure that available generation capacity reaches consumers.