Speaking during a meeting with chairmen of power Generating Companies (GenCos) in Abuja, Adelabu said: “We have to understand that our economy cannot sustain subsidies indefinitely.”
However, he emphasized that the Federal Government would continue to support the economically disadvantaged through targeted subsidies. He did not, however, provide clarity on who qualifies as “economically disadvantaged.”
The government currently owes GenCos over N4 trillion in unpaid subsidies. According to the Nigerian Electricity Regulatory Commission (NERC), in its February DisCos Performance Report, the average actual tariff was N116.18/kWh, while consumers paid an average of N88.2/kWh. The difference of N27.97/kWh represents the subsidy per unit of electricity in that month.
At present, all customers under the Nigerian Electricity Supply Industry (NESI), except those in Band A—about 15% of the total—benefit from subsidies.
ust pay the appropriate price for the energy consumed. The Federal Government will continue to provide targeted subsidies for economically disadvantaged Nigerians.”
He also revealed that the government plans to offset a significant portion of the N4 trillion debt using a mix of cash and financial instruments like promissory notes.
“There is a need to pay a substantial amount of the debt in cash. At the minimum, let us pay a substantial amount, then ask for a debt instrument in promissory notes to pay the rest,” Adelabu said. “We recognise the urgency of this matter. The government is committed to resolving this debt to stabilise the sector and prevent further crisis.”
Earlier in the meeting, Mainstream Energy Solutions Chairman, Col. Sani Bello (retd.), raised concerns about the growing challenges in the sector, warning that the N4 trillion debt poses a severe threat to GenCos’ operations.
“Without urgent intervention, the entire power ecosystem could collapse,” he said, citing liquidity constraints that hinder access to loans and prevent infrastructure maintenance.
Kola Adesina, Chairman of Egbin Power and First Independent Power Limited, echoed Bello’s warning, calling the situation a national emergency.
“Everything hinges on power—industries, homes, hospitals. We cannot afford to let the sector fail,” he stressed.
Association of Power Generating Companies (GenCos) CEO, Dr. Joy Ogaji, outlined key issues affecting GenCos, including chronic payment defaults, inconsistent gas supply, and forex instability.
She pointed out that the naira’s depreciation from N157/$1 in 2013 to N1,600/$1 today has rendered maintenance budgets and loan repayments ineffective.
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