Nigeria's power firms say FG yet to pay N3.3tn approved debt

Nigerian power generation companies (GenCos) have voiced strong dissatisfaction, asserting that the Federal Government has yet to disburse any funds related to the N3.3tn power sector debt settlement approved by President Bola Tinubu in April. Despite official assurances that the payment process has commenced, the GenCos, represented by the Association of Power Generation Companies (APGC), maintain that no payments have been made to most of them.

“

You know that this acceptance of the government is like a moving target. Earlier, the government said the debt was N2.3tn. About a month or two after, it increased to N2.8tn. The last one was N3.3tn before they appointed a new special adviser on power. Now, let me tell you that from that N3.3tn or N2.8tn, to date, we have not received a dime. Nothing has been received by the GenCos.

The APGC is also challenging the Federal Government's revised debt figure. Initially stated as N2.3tn, then N2.8tn, the debt was later set at N3.3tn. However, the GenCos insist that the actual outstanding debt, after reconciliation with gas suppliers, exceeds N4tn. They argue that the reduced amount is unacceptable and that the full original sum remains owed. Joy Ogaji, CEO of APGC, stated emphatically, "Now, let me tell you that from that N3.3tn or N2.8tn, to date, we have not received a dime. Nothing has been received by the GenCos."

Further complicating the situation is the disbursement of a N501bn bond intended to facilitate these payments. According to Ogaji, the government's claim that this bond was raised by December and January has not translated into actual funds received by the GenCos. She suggested that the disbursement process is ongoing and potentially being prolonged, speculating that the delays might be linked to upcoming elections.

“

We have not accepted N3.3tn; the GenCos have not accepted it because when we reconciled our debt to the gas suppliers, we owed them over N4tn.

Presidential spokesman Bayo Onanuga had announced on April 5 that President Tinubu approved the settlement plan, which was based on a verification exercise and intended as a full and final settlement of legacy debts from February 2015 to March 2025. He had also stated that 15 power plants had signed settlement agreements worth N2.3tn and that the N501bn bond was being disbursed. However, the GenCos' current statements directly contradict these claims, highlighting a significant gap between the government's pronouncements and the reality on the ground for the power generation companies.

“

The N500bn bond that they said they raised by December and January this year, as I speak to you, they’ve not even finished disbursing. I believe that they are planning the disbursement until the end of the election.