President Bola Tinubu has approved the payment of N2.8tn to power generation companies as the Federal Government’s verified liability for accumulated electricity subsidies dating back to 2010.
However, the President rejected the N6tn claim submitted by the generation companies (GenCos), insisting he would not approve any payment beyond the audited figure, according to senior officials in the Presidency and the Federal Ministry of Power.
The approval followed months of negotiations and a tripartite audit involving the Ministry of Finance, the Nigerian Bulk Electricity Trading Plc (NBET), and the GenCos.
The development comes days after the Nigeria Labour Congress (NLC) accused the operators of attempting what it described as a “heist” of the national treasury.
According to Presidency sources, the GenCos initially demanded N6tn as legacy debt and proposed N3tn as a federal bailout. During a meeting with the President last August, they reportedly presented a claim of N4tn, warning that the outstanding liabilities could force them to shut down operations.
Tinubu, however, directed that the claims be subjected to a comprehensive audit before any public funds were committed.
“That is your claim. You said the government owes you this much, but I’m not going to pay N6tn just because you said the government owes you. We are going to audit. How did you arrive at that amount in your invoices?” a senior official quoted the President as saying.
While the audit was ongoing, the Federal Government raised N501bn in January through a bond issued under the Presidential Power Sector Debt Reduction Programme. The bond reportedly recorded full subscription from pension funds, banks and asset managers and has since been disbursed to the GenCos as a show of good faith.
Officials explained that the interim payment was meant to demonstrate commitment to resolving the debt while negotiations and verification continued.
With the audit now concluded, the verified liability stands at N2.8tn — significantly lower than the N6.6tn claim recently cited by the Chief Executive Officer of the Association of Power Generation Companies, Dr Joy Ogaji, who warned that the debt was increasing by about N200bn monthly.
“The audit has shown that it is N2.8tn, and it has been brought to the President for approval, and the President has approved it. And then he said he is not going to pay one naira more than that,” a source disclosed.
The power sector debt crisis dates back to the 2013 privatisation of electricity assets, when generation and distribution companies were sold for about N400bn. Since then, regulated tariffs that fall below cost-reflective levels, liquidity challenges and foreign exchange constraints have contributed to mounting unpaid invoices in the electricity market.
