By John Umeh
The Minister of Power, Adebayo Adelabu, has disclosed that the Federal Government may resort to borrowing in order to clear the outstanding N4 trillion debt owed to power generation companies (GenCos) in Nigeria.
Speaking during a recent briefing in Abuja, Adelabu described the mounting debt as a major threat to the sustainability of the power sector, warning that the country risks a total collapse of electricity generation if urgent action is not taken.
According to the minister, the persistent liquidity crisis in the electricity market has made it difficult for GenCos to operate efficiently, as many are unable to pay for gas or maintain their facilities. He emphasized that the current market shortfall has continued to grow, and without government intervention, the situation could further deteriorate.
“The Federal Government is considering all options, including borrowing, to clear the N4 trillion debt owed to GenCos. This is crucial to stabilize the sector and ensure consistent power supply across the country,” Adelabu stated.
He added that settling the debt would restore confidence in the market, encourage private investment, and help resolve the gas supply constraints affecting many thermal power plants.
The minister also called for reforms in electricity tariffs and a more sustainable funding structure for the sector, stressing that the government cannot continue to subsidize inefficiencies at the expense of national development.
