Nigeria’s Minister of Power, Adebayo Adelabu, has raised the alarm over a crippling N4 trillion debt crisis threatening the survival of the country’s power sector, casting a shadow over investor confidence.
Speaking during a high-level meeting with President Bola Tinubu and the Association of Power Generation Companies (GENCOs) at the Presidential Villa, Adelabu described the debt—accumulated since 2015—as a “grave threat” to the sector’s stability and economic progress.
Adelabu highlighted that the massive liability, owed primarily to GENCOs, risks derailing recent reforms that have shown promise.
“Without urgent liquidity support, the sector faces the real risk of generation shutdowns, which would cripple the economy and undo hard-earned gains,” he warned.
The minister pointed to a significant increase in annual sector revenue—from N1 trillion in 2023 to N1.7 trillion in 2024—a 70% rise that reduced government subsidy obligations by over N700 billion.
Additionally, installed generation capacity has grown from 13,000 MW to 14,000 MW, with a record peak of 5,801 MW and no national grid collapses in 2025.
Despite these milestones, Adelabu stressed that the debt overhang remains a critical bottleneck.
He proposed a N4 trillion bond program, which has received anticipatory approval from President Tinubu, as a potential solution. However, he emphasized that the bond’s implementation hinges on verifying the legitimacy of the debts, urging stakeholders to collaborate on finalizing terms.
“Liquidity is the oxygen of the sector,” Adelabu said, echoing concerns from industry leaders like Tony Elumelu and Kola Adesina, who have warned of foreclosure threats from banks due to unpaid dues.
The minister also addressed gas supply shortages, particularly in the Afam axis, where unpaid suppliers have constrained generation.
He suggested unlocking 800 million cubic feet of gas through Nigeria LNG to stabilize output during the reform transition.
President Tinubu, present at the meeting, assured GENCOs of his administration’s commitment to resolving the crisis transparently, appealing for patience as the government audits the claims.
“I accept the assets and liabilities of my predecessors, but that acceptance must be on credible grounds,” Tinubu stated.
The meeting, attended by key figures including Chief of Staff Femi Gbajabiamila and Coordinating Minister of the Economy Wale Edun, shows the urgency of the situation.
Adelabu called for partial debt defrayment to sustain operations while audits continue, expressing confidence that with presidential support, the sector could overcome its challenges and deliver stable power to Nigerians.
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