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FG has pledged to offset the N2 trillion N2 trillion by Gencos in December 2025 to prevent power outages across the country.
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Electricity Minister Adebayo Adelabu said the payment will be through cash and promissory notes after Gencos warned that the payment would be through cash and promissory notes after the closure.
The federal government said it will reach N2 trillion of Gencos’ N4 trillion debt by the end of 2025 to avoid nationwide power shutdowns.
The disclosure was revealed by Power Minister Adebayo Adelabu on Thursday in the sixth ministerial news series held in Abuja.
He said the payments will be made through a mix of direct cash expenditures and promissory notes designed to be “banked and liquid” to ensure Gencos can easily convert it into funds. “We are looking at budget issuances to make cash payments while issuing promissory notes,” he said.
The intervention was conducted after a warning from Gencos under the Association of Power Generators, which threatened to stop sufficient compensation for unpaid subsidies and energy compensation generated.
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Adelabu explained that nearly half of the outstanding debt is inherited, while the rest accumulates in 2024. He attributed the liquidity crisis to Nigeria’s long-term subsidy structure and noted: “The average cost of power generation in a lifetime is N170/kwh, but most customers still only pay N60. This is 65% subsidy.”
Despite the growing tariffs on A’s customers who enjoy 20 hours of electricity per day, the pressure to help subsidies has been reduced by 35%, but the minister stressed that the government will now support the support of real low-income users. “We are not removing subsidies, but reorganizing them… Previously, high-consuming households benefited the most.”
Adelabu also warned the distribution company (Discos) that it was not in line with the required service level, especially the 20-hour supply for Class A customers.
He said: “We are not on the side of the company, we are on the side of Nigerians.
