GenCos: FG sets up committee to resolve debt backlog

GenCos: FG sets up committee to resolve debt backlog

As part of efforts to address the lingering liquidity issues in the power sector, the federal government has constituted a committee to address the payment of outstanding debts owed to Power Generation Companies (GenCos).

Speaking at the 10th anniversary of the Association of Power Generation Companies (APGC) Monday in Abuja, Permanent Secretary Ministry of Power, Mr Mahmuda Mamman, said the committee will help establish sustainable payment mechanisms that will prevent future accumulation of debt.

Represented by Mrs Evangeline Babalola, a Director in the Ministry, Mamman, said the committee’s mandate was not only to clear existing debts but also to ensure financial sustainability in the power sector.

“In recognition of the critical importance of resolving this issue for the sustainability of our power sector, Mr President has constituted a committee specifically mandated to address the payment of outstanding debts owed to the GenCos,” he said.

He praised the GenCos for their resilience and patriotism despite being owed billions of naira, noting that their continued operations have kept the nation’s lights on and the economy running.

“You have not abandoned your posts in spite of severe liquidity challenges that would have forced closure in any other industry. This is not just business; this is patriotism in action,” Mamman said.

He added that President Bola Tinubu was aware of the liquidity constraints facing the Nigerian Electricity Supply Industry (NESI) and was committed to finding lasting solutions to the debt burden.

“As we work to resolve the debt situation, I encourage you to maintain the same spirit of resilience and commitment that has characterised your operations over the past decade,” Mamman said.

He commended GenCos for their contributions to job creation, training of Nigerian engineers and technicians, and for supporting local economies where their plants operated, describing their efforts as “invaluable and recognised.”

In his address, former chairman, National Electricity Regulatory Commission (NERC), Professor Sam Amadi, insisted that states lack the capacity to sustainably manage electricity distribution.

Amadi argued that rather than seeking to amend the laws regulating the sector, the government should focus on the stability in the power sector, stressing that shifting electricity regulation to the states would “surely flop with time”.

“The Nigerian electricity sector is tied to politics so much that if there’s a problem it mainly fits into policy-makers. They start looking for solutions and the solution becomes worse than the problem. I think we should have some stability to allow things to work,” he said.

Senator Enyinnaya Abaribe, chairman of the Senate Committee on Power, said the sector remains crucial to national development.

“Looking ahead, the future of Nigeria’s energy transformation rests upon our collective commitment to innovation, investment, and inclusive stakeholder engagement.

“The power generation sector remains fundamental to our national development aspirations, and the role of APGC in facilitating dialogue, promoting best practices, and advocating for enabling policies cannot be overstated.

“As our nation pursues ambitious goals of energy access, economic diversification, and industrial growth, the contribution of generation companies and their representative association will be absolutely critical,” he said.