The Minister of Power, Adebayo Adelabu, has revealed that the federal government plans to pay off N2 trillion out of the N4 trillion owed to power generation companies (GenCos) by the end of the year. The payment will be made through a combination of cash and promissory notes.
Adelabu, stated that the N2 trillion to be paid—in cash and promissory notes—is a deliberate effort to pacify the GenCos and prevent them from shutting down their plants.
This was disclosed by the Minister during the sixth edition of the 2025 Ministerial Press Briefing Series, where he addressed concerns about rising energy costs, unpaid subsidies, and recent tariff adjustments, on Thursday in Abuja.
Adelabu also disclosed that discussions are already ongoing with the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, who has committed to settling the debt through budgetary allocations or guaranteed instruments like promissory notes.
He added that the promissory notes would be structured to be strong and credible enough for the power generation companies to present at banks to meet their immediate cash needs.
It was earlier reported that Gencos had issued a warning to the Federal Government over the continued accumulation of debts now totalling over N4tn.
In a statement issued under the Association of Power Generation Companies, the GenCos voiced deep frustration over what they described as “inadequate payment for electricity generated and consumed on the national grid.” They warned that the worsening liquidity crisis threatens their continued operation.
Speaking at the event, Minister Adebayo Adelabu clarified that the N4 trillion debt comprises primarily unpaid subsidies—half inherited, and the other half accumulated during the 2024 fiscal year.
He emphasized the government’s commitment to resolving the crisis and stabilizing the power sector.
The minister said, “Let me first explain that these debts are unpaid subsidies of the Federal Government, which are due to the power-generating companies. Almost half of it was inherited, while about half of it came from 2024 operations, which is N4tn.
“I agree with you, there was a publication in the papers where the companies threatened to shut down their plants.”
On the steps to pay the debt, he said, “There are plans underway to make these payments. While I will not say it will be paid 100 per cent, we will be paying it gradually. And the mode of payment is in two ways.
“We have sub-budgetary provisions which will facilitate cash payment while we are discussing with generating companies to give them guaranteed debt instruments like a promissory note, which we will give to them to pay them or defray some of these debts.
“These promissory notes will be liquid enough for them to be taken to the banks for discounting if they need immediate cash injections. So, it is the combination of cash payment and promissory notes. And I can tell you that between now and the end of the year, we are going to pay close to N2tn out of this N4tn.
“I have had discussions with the Minister of Finance and the Coordinating Minister of the Economy, who has promised that they working on the promissory note and once we have budget releases, cash payments will also be made.”
Defending the existence of the subsidy and how the debt was accumulated, he said, “We believe that the average energy cost today per kilowatt of power is about N170 per kilowatt. But 85 per cent of customers are still paying N60.”
He stated that Nigeria has only reduced electricity subsidies by 35% despite last year’s tariff hike for some consumers.
He explained that the government has consistently covered the gap by subsidizing operators, as Nigerians have been paying just about 20% of the actual cost of electricity.
