Nigeria Owes Over ₦4 Trillion to Power Companies, Straining Electricity Sector – Minister

Written on 27/02/2025
Premium Times

The Minister of Power, Adebayo Adelabu, has revealed that the Nigerian government is indebted to electricity generation (GenCos) and distribution companies (DisCos) to the tune of over ₦4 trillion, a financial burden that is crippling the power sector.

Speaking at the public presentation of the National Integrated Electricity Policy (NIEP) and Nigeria Integrated Resource Plan (NIRP) in Abuja on Thursday, Adelabu disclosed that:

  • GenCos are owed over ₦2 trillion, impacting power generation capacity.
  • Unpaid electricity subsidies for 2024 total ₦1.97 trillion.
  • DisCos are owed ₦450 billion in outstanding 2024 subsidies.

The minister emphasized that the massive debt burden is hindering optimal performance in Nigeria’s power sector, calling for urgent reforms to ensure sustainability, efficiency, and financial stability.

 


“One of the major issues concerning liquidity is the huge debt in the sector. We talk about legacy debt to GenCos of almost over 2 trillion. And we have an outstanding unpaid subsidy for 2024 of 1.97 trillion. DisCos are owed N450 billion for the 2024 electricity subsidy.

“How do you expect the GenCos to perform optimally? How do you expect them to pay for gas, service, and maintain their turbines and other infrastructure as well as pay their staff? If a total of N4 trillion is being owed to them,” Mr Adelabu said.

He said the government cannot afford to continue to fund the level of subsidy that the consumption pattern is throwing up.

“I do not deceive myself. The government cannot afford to continue to fund the level of subsidy that our consumption pattern is throwing up. Because we have seen increasing consumption of electricity. As consumption increases, government subsidy also increases,” he added.

Speaking further, he said, more than 60 percent of the country’s manufacturing industry is completely off-grid.

Source