‘Power Woes Deepen As FG Struggles With ₦4 Trillion Debt To GenCos, DisCos’

The Minister of Power, Adebayo Adelabu, has revealed that the Federal Government is indebted to electricity generation companies (GenCos) and distribution companies (DisCos) to the tune of over ₦4 trillion in electricity subsidies.

Speaking at the public presentation of the National Integrated Electricity Policy and Nigeria Integrated Resource Plan on Thursday in Abuja, Adelabu stated that this debt burden is preventing the power sector from delivering efficient services to consumers.

Breaking down the figures, he explained that ₦2 trillion represents legacy debt owed to GenCos, while an additional ₦1.9 trillion is due as electricity subsidies for 2024. DisCos are also owed ₦450 billion in unpaid subsidies for the same period.

The Minister said, “One of the major issues that concerns me is the huge debt in the sector. We are talking about legacy debt, which is across the board, over ₦2tn, and we still have an unpaid subsidy for 2024; we have another ₦1.9 trillion owed to them as part of electricity subsidy for 2024, while DisCos are owed ₦450bn for 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 ₦4 trillion is being owed to them?

“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.

“The key issues are the market, liquidity, and sector reforms. We’ll continue to focus on that. We’ll look at the tariff again. I am not saying that we’re going to increase the tariff but to look at the tariff and see how we can improve upon our modest achievement of last year.”

Adelabu further stated that the government cannot sustain the current electricity subsidy model, noting that a new intervention strategy is being developed to target specific segments of the population in need.

He also expressed concern over the lack of investment in DisCos’ distribution networks, adding that the anticipated migration of more customers to Band A has not materialized due to the inadequate infrastructure investments by DisCos.