• Eight major power generation companies have joined the government’s debt settlement plan
• Industry representatives have questioned how the N3.3 trillion figure was calculated
• Experts say transparency is crucial to ensuring the reform’s success and attracting investment

Oluwatobi Odeyinka is a business editor at Legit.ng, covering energy, the money market, technology and macroeconomic trends in Nigeria.

Eight major electricity generation companies in Nigeria have signed onto President Bola Tinubu’s N3.3 trillion debt settlement programme aimed at addressing liquidity challenges in the power sector.

The agreement, which covers 15 generation plants operated by six private firms and two public entities, is designed to clear longstanding financial obligations that have hindered investment and operational efficiency across the electricity value chain.

Key power firms join debt settlement plan

Findings by BusinessDay show that some of the country’s biggest generation companies are part of the arrangement, including Transcorp Power, Egbin Power Plc, and Geregu Power Plc.

Egbin Power Plc, Nigeria’s largest power plant with an installed capacity of 1,320 megawatts located in Ikorodu, Lagos, is among the most prominent participants.

Geregu Power Plc, which operates in Ajaokuta, Kogi State and is listed on the Nigerian Exchange, also signed the agreement.

Two Transcorp-linked entities – Transcorp Delta in Ughelli and Afam Power in Rivers State – are also included in the deal under the Transnational Corporation group associated with Tony Elumelu.

Other private sector participants include First Independent Power Limited, which operates multiple gas turbine plants in Rivers State, and Mabon Limited, a hydropower concessionaire in Gombe State.

On the public side, the Niger Delta Power Holding Company (NDPHC) is participating with nine plants across locations such as Olorunsogo, Omotosho, Ihovbor, Alaoji, Calabar, and Sapele.

Ibom Power Company, owned by the Akwa Ibom State Government and operating a 190-megawatt facility in Ikot Abasi, is the only state-owned firm among the signatories.

GenCos question N3.3tn debt figure

Despite the development, the Chief Executive Officer of the Association of Power Generation Companies, Joy Ogaji, raised concerns about the accuracy of the N3.3 trillion figure.

Ogaji said the amount being referenced does not align with figures agreed during the latest reconciliation process between power companies and government agencies, which concluded in March 2025.

“We need to understand how this N3.3 trillion was computed,” she said, noting uncertainties around whether the figure covers all invoices, gas supply obligations, and the time period involved.

Longstanding liquidity crisis in the sector

Since the privatisation of Nigeria’s power assets in 2013, the sector has faced persistent liquidity challenges, driven by revenue shortfalls across the value chain.

Distribution companies often collect less than the cost of electricity supplied, leaving generation companies unable to meet obligations to gas suppliers, resulting in a cycle of debt.

According to Ogaji, outstanding claims include unpaid invoices for electricity generated, capacity payments, foreign exchange differentials, and additional costs linked to frequent plant start-ups and shutdowns.

She added that operational instability has increased equipment wear, raising maintenance costs that are not fully captured under current tariff structures.

Government insists on verified claims

A senior government official involved in the negotiations said the N3.3 trillion figure represents verified and audited liabilities, following scrutiny of higher claims reportedly reaching up to N7 trillion.

The official explained that the programme is intended to stabilise the sector while ensuring accountability and fairness to both operators and the public.

Disbursement of funds, according to the official, will be tied to conditions such as settling debts owed to gas suppliers, investing in infrastructure upgrades, and expanding generation capacity.

Experts call for transparency

Power sector analyst Ade Olaniyi stressed the need for clarity and consistency in the figures presented to stakeholders.

He said a transparent and agreed framework is necessary to ensure the success of the repayment plan and restore investor confidence.

Nigeria currently generates between 4,000 and 5,000 megawatts of electricity for a population exceeding 220 million, highlighting the gap between supply and demand.

Resolving the sector’s debt burden is widely seen as critical to attracting investment and improving electricity supply nationwide.

GenCos deny receiving funds despite FG bond

Legit.ng earlier reported that power generation companies have not received any payments from the federal government.

This is despite the N501bn bond issued by the government to clear about N4tn owed to GenCos.

Industry stakeholders warn that the delay could worsen financial pressure on power operators.

Source: Legit.ng