The energy industry experienced some uncertainty on Tuesday after extensive social media reports indicated that the Federal Government had given approval to a N4tn debt restructuring initiative aimed at clearing debts owed to power generation firms.
A widely shared report, credited to a group known as PBATSignal2, stated that the initiative aimed to revive liquidity within the power value chain, enhance investor trust, and ensure a stable electricity supply nationwide. As mentioned in the post, the measure would address outstanding debts incurred between 2015 and 2023, primarily from unpaid bills by the Nigeria Bulk Electricity Trading Company.
The claim stated that the government would reorganize and pay confirmed debts using bonds, government financial tools, and installment cash payments.
It also recommended that the Ministry of Power and the Debt Management Office would oversee the distribution of funds, supported by rigorous verification and audit procedures.
A component of the claimed plan involved allowing GenCos to quickly compensate gas providers, perform equipment maintenance, and increase output, thus enhancing power supply to distribution companies and, in the end, to homes and enterprises.
The post stated: “Debts valued at N4tn, resulting from outstanding invoices by NBET, led to a chain reaction including restricted gas supply, lower power generation, and inadequate distribution. According to the refinancing plan, the government will reorganize and pay confirmed debts via bonds, treasury securities, and gradual cash installments.”
The report also anticipated that the program would decrease power interruptions, enhance the financial stability of Generation Companies (GenCos), and draw new investment into the energy sector.
Nevertheless, Joy Ogaji, the Chief Executive Officer of the Association of Power Generation Companies, rejected the report, stating that the GenCos had not received official notification about any such occurrence.
From whom, if you don’t mind? We haven’t been officially involved,” Ogaji said to our reporter on Tuesday. She mentioned that several important questions still lacked answers: “When? How much cash, and what are the controlled financial instruments?
Ogaji voiced worry that the debts owed to GenCos keep increasing each month, with minimal tangible efforts from the government to address the liquidity problem. “Empty statements cannot settle obligations,” she emphasized.
The energy industry has faced ongoing issues with insufficient cash flow, leaving Generation Companies and gas providers dealing with outstanding bills and limited market liquidity. Industry experts have consistently pointed out that the failure of NBET and Distribution Companies to make full payments has undermined the sector, deterring new investments and endangering the nation’s power supply.
Gas providers, specifically, have started reducing supply to power stations as a form of protest against increasing unpaid bills. Ogaji mentioned that this situation is becoming worse, with gas companies owing trillions of naira. She cautioned that this will further limit power generation and make Nigeria’s electricity problems more severe.
In a recent discussion with GenCos, President Bola Tinubu reportedly recognized the magnitude of the debts but requested more time to confirm the details before authorizing any payments. This careful stance has caused concern among industry players, as the financial shortage keeps deteriorating each day.
Although operators appreciated the President’s readiness to discuss the issue, they highlighted the need for immediate steps to avoid additional problems in electricity production and distribution.
Industry players have called on the Federal Government to release an official announcement to explain the situation regarding the reported N4tn refinancing initiative. They claim that ambiguity and contradictory details only undermine investor trust, especially as Nigeria faces challenges in drawing private investment into the energy sector.
For Generation Companies, clear communication and tangible steps are essential. As Ogaji mentioned, “Each month, the debt grows, and without immediate solutions, the problem might develop into a severe crisis that undermines the electricity supply chain.”
Until the Federal Government officially confirms it, the claimed N4tn rescue package is still just speculation. However, it is evident that Nigeria’s power sector keeps facing severe debt, insufficient gas supply, and low electricity generation—issues that demand immediate and open solutions.
Currently, industry stakeholders remain doubtful, stating that no refinancing strategy has been shared with them. Regardless of whether such a rescue package ultimately comes to fruition, this situation highlights the critical requirement for transparency, active involvement, and firm reforms to save Nigeria’s electricity sector from ongoing turmoil.
Provided by SyndiGate Media Inc.Syndigate.info).
