The Federal Government and power generation companies are at odds over the size of outstanding debts in Nigeria’s electricity market, with both sides presenting conflicting figures amid ongoing reconciliation efforts.
Minister of Power, Adebayo Adelabu, said the government’s liabilities to generation companies may be significantly lower than widely reported, estimating the figure could settle around N4 trillion rather than the N6.3 trillion often cited.
Speaking at a press briefing in Abuja, Adelabu explained that earlier estimates are being adjusted following audits and reconciliation of claims.
“The amount we owe GenCos is estimated and is still being reconciled… by the time reconciliation is concluded, it will probably be around N4tn total,” he said.
He noted that an earlier figure of N4 trillion as of the end of 2024 was revised downward to about N2.8 trillion after accounting for interest and foreign exchange components.
Adelabu also revealed that a substantial portion—at least 60 per cent—of the liabilities is tied to gas supply, a critical input for electricity generation in Nigeria.
However, power generation companies have pushed back, insisting that the government’s figures lack transparency and were not jointly verified.
Responding, Joy Ogaji, Executive Secretary of the Association of Power Generation Companies, said reconciliation must involve all stakeholders and reflect agreed data. “We are talking about a bilateral agreement, which means reconciliation of figures should be done by all parties,” she said, noting that the last joint reconciliation meeting took place in March 2025.
Ogaji questioned how the government arrived at its updated estimates, adding that generation companies were not involved in any recent verification process.
“The GenCos confirmed that after the March reconciliation, no other reconciliation has been done. So how did the government get its figures from?” she asked.
She also criticised reliance on the Nigerian Bulk Electricity Trading Plc (NBET) as a primary source of data, stressing that accurate figures require broader market validation.
According to her, GenCos’ claims are based on contractual agreements and include multiple cost components often overlooked. These include unpaid invoices for electricity supplied since 2015, capacity payments, foreign exchange differentials, and charges arising from frequent plant start-ups and shutdowns.
Other liabilities include interest on outstanding payments, VAT on gas supplied between 2013 and 2021, and losses linked to low plant utilisation caused by gas shortages and transmission constraints.
The dispute comes amid broader efforts by the Federal Government to reform the power sector and address longstanding liquidity challenges.
Earlier, President Bola Tinubu approved N2.8 trillion as the verified portion of legacy debts owed to GenCos, based on an audit of subsidy obligations accumulated over the years.
A government source said the approved figure reflects validated claims, while discussions continue to reconcile outstanding components.
The disagreement highlights persistent structural issues in Nigeria’s electricity market, including tariff shortfalls, legacy debts, and inefficiencies that have constrained investment and reliable power supply.
Analysts say resolving the dispute through transparent reconciliation will be critical to restoring investor confidence and achieving long-term stability in the sector.
