The Federal Government has paid ₦1.23 trillion in outstanding debts owed to electricity generation companies (GenCos) and plans to settle the remaining balance in 2027.
The Minister of Power, Joseph Tegbe, disclosed this on Monday at the Harvard Business School Association of Nigeria (HBSAN) Energy Conference in Lagos.
According to the minister, the payments were made through bond issuances under the government’s power sector debt reduction programme, designed to address long-standing financial obligations in Nigeria’s electricity industry.
Tegbe said the government was committed to clearing the outstanding debts while introducing measures to prevent fresh arrears from accumulating across the power sector.
He explained that settling the debts was essential to improving the financial position of electricity generation companies, attracting private investment and strengthening electricity supply to households and businesses nationwide.
The minister added that the government’s approach went beyond paying historical debts, as it also aimed to establish a more financially sustainable electricity market.
He stressed the importance of making better use of available power generation capacity and ensuring that companies across the electricity value chain met their financial obligations.
The debt settlement programme is expected to improve liquidity in the sector, enabling generation companies to meet their commitments to gas suppliers, lenders and maintenance contractors.
The government also hopes that resolving the outstanding obligations will restore investor confidence and encourage further investment in electricity generation and related infrastructure.
Tegbe reaffirmed the administration’s commitment to providing Nigerians with a more reliable electricity supply while ensuring that vulnerable consumers receive adequate protection.
He said clearing the debts and addressing the structural challenges affecting the electricity market would help create a stronger sector capable of supporting homes, businesses and industries.
However, the government faces the additional challenge of ensuring that new unpaid obligations do not emerge after the existing debts have been settled.
Officials have therefore emphasised the need for stronger payment discipline, improved revenue collection, reduced technical and commercial losses, and greater accountability throughout the electricity industry.
The Federal Government maintains that these measures, alongside the debt settlement programme, are necessary to establish a more stable and investment-ready power sector capable of supporting Nigeria’s economic growth.
