Power generation companies (GenCos) have stated that no final agreement has been reached with the Federal Government over the alleged ₦4 trillion legacy debt in the power sector, contrary to recent reports claiming otherwise.
The debt, which covers unpaid costs owed to GenCos and gas suppliers for years of under-collection and subsidy shortfalls, has long been a sticking point in Nigeria’s power reforms.
In a press release issued late Tuesday, the GenCos said they remain excluded from how the government plans to reconcile and settle the verified amounts. “Discussions are ongoing,” the statement read. “No deal has yet been struck that accounts for all operators.”
In August 2025, President Bola Tinubu approved a framework for a ₦4 trillion government-backed bond intended to settle verified power sector arrears. The plan was endorsed by the Federal Executive Council and is part of the Presidential Power Sector Debt Reduction Plan.
However, GenCos say they have not been sufficiently consulted in the verification process. They warn that some operators may not receive fair settlement if discrepancies are not resolved.
Their concerns range from how the verification committee was constituted, to the criteria used to approve claims, and the mechanism by which payments will be distributed.
In support of the plan, the government claims it has finalized implementation frameworks, including bilateral negotiations, to ensure balance between fiscal capacity and GenC0 viability. A statement from the Office of the Special Adviser on Energy confirms these steps.
But until GenCos are brought fully onboard the process, mistrust lingers. One GenCo executive, speaking anonymously, said, “We want transparency, not surprise payments.”
Observers warn that a mismanaged debt settlement could undermine investor confidence, entrench inefficiencies, and worsen power sector instability.
