The federal government plans to pay power generation companies  (GenCos) N2 trillion out of the N4 trillion debt owed to them before the end of 2025.

The Minister of Power, Adebayo Adelabu, said this on Thursday in Abuja at the sixth edition of the 2025 Ministerial Press Briefing Series.

“I can tell you that between now and the end of the year, we are going to pay close to two trillion naira out of the four trillion naira owed GenCos,” Mr Adelabu said.

Mr Adelabu was reacting to an appeal by the GenCos urging the federal government and stakeholders in the power sector to settle the outstanding debts owed to them for electricity generated.

“These debts are primarily unpaid subsidies; almost half of it was inherited, while about half came from 2024 operations.

“There are plans underway to make these payments. I will not say it will be paid 100 per cent; we will be paying it gradually,” the minister said.

Mr Adelabu said the mode of payment would be in two ways, adding that some budgetary provisions would facilitate cash payments.

He said the government was also discussing with the GenCos to give them some guaranteed debt instruments like promissory notes.

“These promissory notes will be liquid enough to be taken to the banks for discounting if they need immediate cash injection. It is a combination of cash payments and promissory notes.

“I had discussions with the Minister of Finance and the Coordinating Minister for the Economy, who promised that they are working on the promissory note, and he said once we have budget releases, cash payments will also be made,‘’ he said.

Mr Adelabu also said the government had earmarked N25 billion in the 2025 budget to light up major highways in the country as part of national security efforts.

The minister said that beyond just supplying power to homes and businesses, lighting up highways was also part of the federal government’s strategy to improve security.

Mr Adelabu said the government could not keep funding subsidies after privatisation, which keeps growing on an annual basis.

“As our consumption grows, government subsidy keeps growing. So we need to nip it in the bud.

“We are not saying stop subsidy completely. But subsidy in the past has always been favouring the higher echelon in our society because of huge consumption.

“We want to devise a subsidy strategy that will favour the poor so that it will be graduated. If you consume energy to a particular threshold, you will enjoy a subsidy.

“Once it is going above a particular threshold, the tariff will go up so that the poor will not be impacted negatively because of the subsidy,” he said.

Mr Adelabu also said the Nigerian Electricity Regulatory Commission (NERC) oversight function would remain strong in ensuring that electricity  Distribution Companies (DisCos) meet their service obligations.

The minister said that DisCos charging the Band A tariff but failing to provide 20 hours of electricity daily would be penalised.

“If it is discovered that any DisCo is collecting a tariff but not supplying up to 20 hours, there are penalties.

“Recently, eight DisCos were fined N628 million. The moment they are detected, they will be fined. Where you have feeders downgraded from band A, they are not expected to charge band A,‘’ Mr Adelabu said.

(NAN)