The Minister of Power, Adebayo Adelabu, announced the Federal Government’s dedication to addressing the inherited N3 trillion debt in the power sector. In a briefing in Abuja, Adelabu disclosed that the government owes Power Generating Companies (GenCos) a total of N1.3 trillion, with a majority owed to gas suppliers. Additionally, there is a legacy debt of $1.3 billion to gas supplier companies, which translates to approximately two trillion Naira at the current exchange rate. When combined with the debt owed to GenCos, the inherited debt in the power sector surpasses three trillion Naira.
Adelabu emphasized the government’s commitment to resolving these financial challenges to propel the sector forward, stating that Nigerians have the right to understand the situation. The government’s strategy involves utilizing a combination of cash payments and guaranteed debt instruments to settle outstanding obligations to gas suppliers and power generation companies.
Furthermore, the Ministry of Power is collaborating with the Ministry of Finance, Budget and Economic Planning, as well as the office of the Special Adviser on Energy to the president, to address the lingering debt. Additionally, efforts are underway to establish firm gas supply contracts for GenCos in coordination with the Minister of State for Petroleum Resources (Gas), with a focus on agreeing on stable domestic gas supply pricing in local currency to mitigate price fluctuations.
