Despite the Ministry of Power’s promise that President Bola Tinubu would soon meet with power generation companies to discuss the N4.7tn debt owed to them, there has been a deafening silence, with no communication extended to the GenCos nearly two months later, The PUNCH reports.
Last month, the Federal Government said that it planned to pay N2tn of the N4.7tn debt before the end of the next quarter, according to the Special Adviser to the President on Energy, Olu Verheijen.
However, despite all the promises, the GenCos told our correspondent that the Federal Government has yet to contact them for any discussion about payment or how to see the President.
But the Minister of Power, Adebayo Adelabu, through his media aide, Bolaji Tunji, told The PUNCH that efforts were still ongoing to arrange a meeting between the generation companies and Tinubu.
Speaking with The PUNCH on the matter, the Chief Executive Officer of the Association of Power Generation Companies, Joy Ogaji, confirmed that the association had yet to hear from the Federal Government.
According to her, neither had a date been fixed for the meeting, nor had the Federal Government contacted the GenCos for further discussions. Asked if the Federal Government had reached out to the GenCos on the meeting with Tinubu, Ogaji replied, “Not yet. We are still waiting.”
Earlier, Ogaji had urged Tinubu to hasten the plan of meeting with the firms over the N4.7tn power sector debt to the GenCos. She expressed cautious optimism over the promise that the government would pay the debt.
The PUNCH recalls that following a high-level meeting between the Minister of Power, Adebayo Adelabu, and chairmen of GenCos, in Abuja amid mounting fears of a possible collapse of the national grid due to liquidity constraints in the sector, the government announced that Tinubu would meet with the generation companies.
At the meeting held in May, the power minister pledged immediate action to reduce the N4.7tn debt owed to the GenCos.
A statement by the power minister’s media aide, Tunji, on May 5, stated that the Federal Government had resolved to settle a substantial portion of the debt immediately, while the remainder would be cleared through financial instruments such as promissory notes within the next six months.
Tunji said the payment plan would be proposed in a meeting being planned between Tinubu and the Gencos’ leadership. However, it was learnt that nothing had been paid to the GenCos as of the time of filing this report.
Ogaji, who was also at the meeting with the power minister in May, told our correspondent that the meeting ought to be held “as soon as possible.” She had earlier said that the requests of the GenCos have been chronicled in a letter submitted to the Federal Government.
The executive secretary highlighted the challenges facing the power generation companies, including erratic gas supply, persistent defaults on payments, and foreign exchange volatility.
Speaking at the meeting, she noted that the dramatic depreciation of the naira—from N157 to $1 in 2013 to N1,600 to $1 now—severely affected maintenance budgets and loan repayments. “Gencos have borne unsustainable risks—from grid failures to unproductive taxes—while remaining patriotic,” she said.
But the power ministry stated that once a time is fixed for the meeting with the President, the GenCos would be contacted. The power minister’s aide told our correspondent in a brief interview that he was working on how to arrange the planned meeting with the President.
“Once a time is fixed, it would be conveyed to them. The minister is working on it,” Tunji said.
The PUNCH earlier reported that Gencos had issued a warning to the Federal Government over the continued accumulation of debts now totalling over N4.7tn. The companies said they were currently owed N2tn for power supplied in 2024 and N1.9tn in legacy debts.
Reacting to this, Adelabu had said there was a need to pay a substantial amount of the debt in cash. “At the minimum, let us pay a substantial amount, then ask for debt instruments in promissory notes to pay the rest,” the minister stated.
Meanwhile, The PUNCH reports that the power sector is currently on the brink, battling a liquidity crisis and the failure to pay gas companies.
Stakeholders had expressed fears that some power generation companies might be forced to shut down due to a lack of liquidity in the sector unless there was an urgent intervention by the Federal Government to clear the debts to GenCos.
With the N4.7tn debt, our correspondent gathered that generation companies are facing challenges in running their power plants. It was learnt that gas-fired thermal plant owners are mostly affected as they are unable to pay gas companies supplying them with feedstock.
Transcorp Power once lamented that it was being owed about N650bn for the power it generated, saying the lack of liquidity affected its ramp-up plans. Our correspondent gathered that at the end of every month, over N200bn is added to the debt burden owed to the Gencos.
According to a document sighted by our correspondent, the total invoice from January to December 2024 was N2.7tn, out of which N762.1bn was paid, leaving an outstanding of N1.94tn. This indicates that the GenCos were only able to recover 28.18 per cent of their total debt for the first 11 months of 2024.
Operators feared that if nothing is done urgently, many power plants might stop running or be denied access to gas supply to avoid incurring more debts. Many have also wondered how the Federal Government plans to offset the debt with a budget of N900bn for the sector.
PUNCH.
