Succour for Power as Government Moves to Clear Outstanding Debts

In a bid to revitalize the country’s ailing power sector, the Presidency has initiated a process to settle the long-standing debt of N2 trillion owed to electricity generation companies.

This development was disclosed by Eriye Onagoruwa, representative of the Special Adviser to the President on Energy, at the recent Nigerian Electricity Supply Industry Stakeholders Meeting.

According to Onagoruwa, the government is exploring alternative financial instruments to offset the debt, given the current fiscal constraints.

The Coordinating Minister of the Economy and the Debt Management Office are reportedly working in tandem to facilitate the process. Onagoruwa expressed empathy towards the generation companies, acknowledging the strain the debt overhang has placed on their operations and the overall electricity supply nationwide.

The move comes as a relief to the generation companies, which had earlier warned the government about the accumulating debt, now estimated to be over N4 trillion.

The Senate Committee on Power had also raised concerns about the liquidity crisis in the sector, citing monthly tariff shortfalls of around N200 billion.

The recent stakeholders’ meeting, hosted by the Nigerian Electricity Regulatory Commission, brought together key players in the electricity value chain to address pressing issues, including the metering gap, the Presidential Metering Initiative, and the proposed Meter Asset Fund.

John Akinnawo, acting Managing Director of the Nigerian Bulk Electricity Trading Plc, cautioned against market fragmentation, emphasizing the need for policy and operational harmonization.

Abdu Mohammed Bello, Managing Director of the Nigerian Independent System Operator, presented an overview of the agency’s vision, mission, and core functions, highlighting its role in promoting transparency, system coordination, and operational stability in the evolving electricity market.

The government’s intervention has been welcomed by stakeholders, who expressed optimism that the combined reforms would help reposition the country’s electricity supply industry for long-term sustainability. With the Presidency’s commitment to resolving the debt issue, Nigeria’s power sector may finally be on the path to recovery, paving the way for a more stable and reliable electricity supply.