₦airaland Forum

The Permanent Secretary, Ministry of Power, Mr. Mahmuda Mamman, announced the development on Monday in Abuja at the 10th-anniversary celebration of the Association of Power Generation Companies of Nigeria (APGC).

The President Bola Tinubu-led Nigerian government has constituted a committee to resolve the longstanding debt crisis plaguing Power Generation Companies (GenCos).

The move, coming after years of strained relations between the government and power producers over unpaid invoices, is aimed not only at clearing the arrears but also at creating a payment structure that ensures future sustainability.

The Permanent Secretary, Ministry of Power, Mr. Mahmuda Mamman, announced the development on Monday in Abuja at the 10th-anniversary celebration of the Association of Power Generation Companies of Nigeria (APGC).

Mamman, who was represented by Director in the Ministry, Mrs. Evangeline Babalola, said the committee’s task extends beyond debt repayment to establishing mechanisms that would prevent a recurrence of the liquidity crisis that has crippled the Nigerian Electricity Supply Industry (NESI).

“In recognition of the critical importance of resolving this issue for the sustainability of our power sector, Mr. President has constituted a committee specifically mandated to address the payment of outstanding debts owed to the GenCos,” he said.

He commended the GenCos for their endurance and patriotism despite operating under immense financial strain.

"You have not abandoned your posts in spite of severe liquidity challenges that would have forced closure in any other industry. This is not just business; this is patriotism in action,” Mamman said.

He assured industry players that President Tinubu was fully aware of the liquidity challenges confronting the sector and remained determined to implement measures that would bring lasting relief.

“As we work to resolve the debt situation, I encourage you to maintain the same spirit of resilience and commitment that has characterised your operations over the past decade,” Mamman said.

The event, themed “A Decade of Powering Progress, Driving Nigeria’s Energy Transformation,” provided a platform for stakeholders to reflect on the sector’s decade-long journey since privatisation — one marked by ambition, investment, and recurring financial bottlenecks that continue to test Nigeria’s power reform agenda.

In April, Power generation companies (GenCos) in Nigeria raised the alarm over an imminent shutdown of electricity plants across the country due to a staggering N4trillion debt owed by the Nigerian government.

In a statement issued by Colonel Sani Bello, the Chairman of the Board of Trustees of the Association of Power Generation Companies (APGC), the GenCos had disclosed that they were currently owed N2trillion for electricity supplied in 2024 and an additional N1.9 trillion in legacy debts.

The companies had lamented that they receive less than 30% of their monthly invoices for power supplied to the national grid, severely hampering their ability to sustain operations.

“The power generation companies have continued to bear the brunt of the liquidity crisis in the Nigerian Electricity Supply Industry (NESI).

"Despite significant investments and efforts to ramp up capacity, GenCos face systemic constraints, unfriendly policies, and mounting debts without a clear repayment plan. The absence of firm contracts and a securitized market has further complicated financial planning," the statement read.

The GenCos had warned that the liquidity crisis could trigger a total collapse of the electricity value chain, leading to widespread blackouts.

nothingspoil70:
Tinubu is working day and night to clear all the mess created by past administrations. From messy exchange rates, to an economy in a state of comatose, he is relentless.

May God bless and strengthen our president Amen.

valuedammy:
How was the debt accumulated in the first place ?

You claim to pay subsidy for what we are also paying for and we we don't get it constantly.

Next news you will hear is that "Tinubu to pay for the prepaid meter distributed Nigerians ", same Prepaid we are paying heavily to get .

nothingspoil70:
Tinubu is working day and night to clear all the mess created by past administrations. From messy exchange rates, to an economy in a state of comatose, he is relentless.

May God bless and strengthen our president Amen.

MVLOX:
How about the plenty he is creating for the generation unborn.....

nothingspoil70:
Tinubu is working day and night to clear all the mess created by past administrations. From messy exchange rates, to an economy in a state of comatose, he is relentless.

May God bless and strengthen our president Amen.

nairalanda1:
1. Subsides only cover the difference between the cost of production and the government set price, thus no profit is made

As an example, say I bake bread for 2000 a loaf and government says I should sell it at 1000 a loaf. The government pays me a subsidy of 1000 per loaf. No profit

Meanwhile before government told me to sell at 1000 , I was selling at 2700, meaning I made a profit of 700 per loaf of bread.

No profit, no ability to pay for maintenance costs, staff salaries ,etc for my bakery. I can't even attract investment self because no bank is going to lend me money.

2. Government revenues have been low because they don't match up with baseline oil price for the budget. And because oil prices never exceed our fiscal break even

3. Also 40% of power consumers don't pay for the power they use. More loss

4. And the scary thing? We need 10-15 trillion naira yearly for 10 years to ensure everyone on the grid gets light. It costs more than that to get every Nigerian power. That cometh from investment which won't come because government is subsidizing power.

That's why we don't have light

JAYMMO:
When will FG set up committee to clear ex- PHCN staff' benefits?

CorperKola:
You cannot say for certain the actual subsisdy that was agreed, it all depends on their agreement , the subsidy may make an allowance for a little profit margin.
Stop saying things you dont know with such confidence

nairalanda1:
Subsidies don't do as you say.

Plus there is more of an issue from underpay and zero paying consumers

Also, subsidies prevent cost reflective tarrifs which would cover any increases on the cost of production

Plus, note that government has issues meeting up due to oil prices not favoring us, and even then, we need 15 trillion naira annually over 10 years for any lasting improvement

Subsides don't work. We've tried them for decades.

CorperKola:
Other countries have subsidies
This subsidies dont work argument is dishonest and wicked, lot of countries have subsidies
The problem is to run them efficiently and transparently.
You can say Nigerian govt officials are incompetent and unpatriotic not subsidies dont work

freakyavia:
baba you get strength oo to dey answer some people who are beyond reasoning

nairalanda1:
Other countries also pay for subsides at tax rates you won't tolerate here

CorperKola:
Those countries also dont have politicians that use govt money to buy houses in the US and UK routinely
Among other corrupt practices