President Bola Tinubu has approved the gradual payments of power sector debts estimated at over N3.3tn. The debts owed to power generating companies and gas producers will be settled through cash injections, promissory notes, and future royalties. The Federal Government has already started paying the cash part of the N1.3tn debt owed to Gencos and plans to settle the remaining amount via promissory notes within a timeframe of two to five years. Additionally, about $1.3bn owed to gas companies will be paid through a combination of cash and future royalties. This move aims to address the longstanding issue of power outages in Nigeria by stabilizing the power sector financially.
Minister of Power, Chief Adebayo Adelabu, revealed these details during the 8th Africa Energy Marketplace event in Abuja, emphasizing the importance of sustainable energy policies and investments for Nigeria’s energy future. The government’s intervention includes immediate payments from the Gas Stabilisation Fund towards reducing the debts owed to gas suppliers and power generators. By utilizing future royalties and income streams in the gas sub-sector, the government aims to incentivize gas companies to enter into firm supply contracts with power generation companies, ensuring consistent power generation in the country.
President Tinubu’s approval signifies a significant step towards resolving the financial challenges faced by Gencos and gas producers in Nigeria’s power sector, ultimately contributing to a more stable and reliable electricity supply across the nation.
