Power sector faces collapse without urgent debt payment – Minister

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ter of Power, Adebayo Adelabu, has warned that Nigeria’s power sector could face imminent collapse if urgent liquidity support is not provided to offset the N4tn debt owed to power generation companies. Speaking during the recent meeting between President Bola Tinubu and members of the Association of Power Generation Companies at the Presidential Villa, Adelabu said the debt overhang, a legacy liability dating back to 2015, poses a grave threat to the sector’s progress and the broader economy. A statement by the minister’s spokesman, Bolaji Tunji, on Monday, said Adelabu warned that the sector’s “progress risks being derailed by a N4tn debt overhang owed to Gencos—a legacy liability accumulated since 2015.” He also stressed that “without urgent liquidity support, the sector faces the real risk of generation shutdowns, which would cripple the economy and undo the hard-earned gains” of the Tinubu administration. So This Happened (EP 258) Reviews NNPC’s Plans To Secure A $2 Billion Oil-backed Loan, Others Though the President pleaded for time to verify Gencos’ N4tn debt claims, Adelabu appealed for partial debt defrayment to sustain operations while audit processes conclude, emphasising that the Tinubu administration’s reforms have already laid the groundwork for a self-sufficient power market. Adelabu commended Tinubu for his decisive intervention in addressing the longstanding debt crisis affecting Nigeria’s power generation companies. He lauded the administration’s commitment to resolving the liquidity challenges stifling the sector’s growth. Adelabu highlighted the strides made in the power sector since May 2023, crediting the president’s “visionary leadership for restoring investor confidence and driving tangible improvements“ across the electricity value chain. He emphasised that the president’s presence at the meeting underscored his unwavering dedication to the stability and sustainability of Nigeria’s power sector, noting that in less than two years, the administration had achieved critical milestones that were once deemed impossible. The minister listed key achievements under the Tinubu administration, which include the enactment of the Electricity Act (2023), the first legislation signed by Tinubu, which decentralised and liberalised Nigeria’s electricity market to foster competition and private-sector participation. Related News