ABUJA — The Association of Power Generation Companies (GenCos) has sounded a fresh alarm, alleging that the Federal Government has yet to release any portion of the ₦3.3 trillion power sector debt settlement approved by President Bola Ahmed Tinubu in April 2026.
The Dispute Over Debt Settlement
Dr. Joy Ogaji, Chief Executive Officer of the Association of Power Generation Companies, disclosed during a recent webinar that despite official government announcements that the payment process had commenced, power operators have not received the funds.
Key points raised by the GenCos include:
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"Moving Target" Figures: While the Federal Government settled on ₦3.3 trillion as the final figure for legacy debts accumulated between February 2015 and March 2025, GenCos contend that their own reconciled records place the actual debt closer to ₦7 trillion.
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Unsettled Bonds: Dr. Ogaji further highlighted that a separate ₦501 billion bond, intended to settle a negotiated ₦827.16 billion portion of current debts, remains largely unresolved. According to the GenCos, only five operators signed onto this arrangement because it required others to accept a 50 percent cut in their claims.
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Lack of Direct Payment: Addressing the status of the ₦3.3 trillion package, Dr. Ogaji stated emphatically, "To date, we have not received a dime. Nothing has been received by the GenCos."
Government’s Position vs. Operator Reality
In April 2026, the Presidency, through Special Adviser Bayo Onanuga, announced that President Tinubu had approved the ₦3.3 trillion settlement to stabilize the sector. At that time, the government claimed that implementation had begun, noting that 15 power plants had signed agreements totaling ₦2.3 trillion and that ₦223 billion had been disbursed as part of the initial phase.
The government has consistently maintained that these payments are part of a market-based reform programme designed to ensure transparency and verify all claims before disbursement. They argue that the process involves phased, conditional payments based on reconciled data rather than automatic, blanket settlements.
Implications for the Power Sector
The disagreement underscores a deepening rift between the federal authorities and the private operators responsible for generating Nigeria’s electricity. GenCos have long cited the massive, unpaid debt as the primary factor limiting their ability to maintain infrastructure, procure gas, and sustain stable electricity supply to the national grid.
As the government continues its broader power sector reform including tariff adjustments and grid stabilization efforts the inability to resolve this liquidity crisis remains a significant bottleneck to the administration's goal of reliable power delivery for businesses and households.
