Abuja, Nigeria – The Federal Government and power generation companies are at odds over how much Nigeria owes electricity producers, with ministers and sector operators citing different figures. The government says reconciled liabilities may settle around N4 trillion, while generation firms argue that existing estimates are incomplete and demand a full, joint audit.
Okay News reports that Minister of Power Adebayo Adelabu told a press briefing that the actual debt to generating companies (GenCos) is being reconciled and could be lower than the N6.3 trillion often quoted in the sector. He said an earlier figure of N4 trillion had been adjusted down to about N2.8 trillion after accounting for interest and foreign‑exchange components, with some GenCos agreeing and others still negotiating.
Adelabu stressed that a large share of the obligations relates to gas supply, which powers most of Nigeria’s electricity plants. “What I can tell you is that a proportion of this, which is not less than 60 per cent, is being owed to gas suppliers,” he said. The government maintains that clear reconciliation will help sanitise the power market and ease the liquidity crisis that has long hampered the sector.
However, the Association of Power Generation Companies disagrees with the government’s account. Executive Secretary Joy Ogaji insisted that the last comprehensive reconciliation among all parties was in March 2025 and said no new full reconciliation has occurred since then. She questioned how the government arrived at its updated totals and called for transparent breakdowns of the components used.
GenCos argue that their outstanding claims are rooted in long‑standing contracts and include multiple cost elements. These include unpaid invoices for power generated since 2015, capacity and deemed‑capacity payments, foreign‑exchange differentials, and supplementary charges from frequent plant start‑ups and shutdowns, now running more than 365 times a year. They also cite interest on arrears at NIBOR plus 4 per cent, value‑added tax on gas supplied between 2013 and 2021, and losses from low plant utilisation due to gas shortages and transmission bottlenecks.
The generation firms add that they incur extra costs from providing ancillary services such as spinning reserve and black‑start capability, and from being instructed to run certain plants in Free Governor Mode, which increases wear without adequate compensation. They say proper quantification of these charges is missing from current public figures and the reconciliation process.
A government source confirmed that President Bola Tinubu has approved N2.8 trillion as the verified portion of legacy debts, based on an audit of subsidy obligations since 2010. The official said reconciliation will continue to address other disputed components. The standoff underlines the urgency of resolving legacy debts, tariff gaps, and market inefficiencies so Nigeria can attract more investment and improve power supply.
