Nigeria TV Info 

FG, GenCos Clash Over Electricity Debt Reconciliation

The Federal Government (FG) and Nigeria’s power generation companies (GenCos) are locked in a fresh dispute over the reconciliation of longstanding debts in the electricity sector, highlighting deep-seated financial and structural challenges in the industry.

At the centre of the disagreement is the actual amount owed to GenCos. The Minister of Power, Adebayo Adelabu, stated that ongoing reconciliation suggests the government’s liability could be significantly lower than widely reported figures. According to him, while industry estimates often put the debt at over ₦6 trillion, the reconciled figure may settle closer to ₦4 trillion after proper auditing and verification.

Adelabu explained that earlier estimates included interest charges and foreign exchange components, which were adjusted during the audit process. He added that about 60 per cent of the debt is tied to gas supply obligations, a critical input for electricity generation.

However, GenCos have strongly challenged the government’s position, insisting that the reconciliation process lacks transparency and proper stakeholder involvement. The Association of Power Generation Companies (APGC) argued that no comprehensive reconciliation has been conducted since March 2025 and questioned how new figures were derived without their participation.

Industry operators maintain that the debt reflects multiple components beyond basic invoices. These include unpaid electricity bills dating back to 2015, capacity payments, foreign exchange differentials, interest on outstanding sums, and operational costs linked to frequent plant shutdowns and restarts.

The disagreement comes amid broader efforts by the government to stabilise the power sector through initiatives such as the Presidential Power Sector Debt Reduction Programme, which includes bond issuances to offset legacy debts. Despite these efforts, delays in payments and disputes over verified amounts continue to strain relationships between the government and electricity producers.

Analysts warn that the lingering dispute could undermine investor confidence and worsen liquidity challenges in the sector, which already faces mounting debts projected to rise sharply if unresolved.

Ultimately, stakeholders agree that a transparent, inclusive, and credible reconciliation process is essential to resolving the crisis, restoring trust, and ensuring stable electricity supply for Nigerians.