TINUBU GIVES APPROVAL FOR N2.8TN GENCOS PAYMENT AFTER REVIEW
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By: Fasasi Hammad
Bola Tinubu has approved the payment of ₦2.8 trillion to power generation companies (GenCos), representing the Federal Government’s verified debt for accumulated electricity subsidies dating back to 2010.
The approval follows months of negotiations and a three-way audit involving the Ministry of Finance, the Nigerian Bulk Electricity Trading Company (NBET), and the GenCos. Tinubu declined the operators’ initial ₦6 trillion claim, insisting that payments would be based strictly on audited figures.
According to a Presidency source, when GenCos presented the ₦6 trillion figure last August, the President made it clear that the claim would be independently verified before any settlement. The audit has now determined the government’s actual liability at ₦2.8 trillion.
Earlier in January, the government raised ₦501 billion through a bond under the Presidential Power Sector Debt Reduction Programme, which was released as an interim measure while the audit was ongoing.
Tinubu has attached strict conditions to the disbursement, directing that a substantial portion of the funds be used to clear GenCos’ debts to gas suppliers—an issue often blamed for recurring grid collapses. Sources indicated that the government would mandate how much must go toward settling gas obligations to prevent further disputes.
Additional payments estimated between ₦600 billion and ₦800 billion are expected from May to July, bringing total disbursements to roughly half of the approved amount by mid-year. The remaining balance is expected to be spread over 12 to 24 months.
The audit also flagged concerns about underinvestment in infrastructure by power operators, noting that some generation and distribution companies collect revenue without adequately reinvesting in the system. As a result, part of the ₦2.8 trillion payment will be tied to compulsory infrastructure upgrades, with proof of compliance required.
Meanwhile, the Nigeria Labour Congress has criticised the planned payout, describing the power sector privatisation as “a grand deception.” The union cautioned against rewarding companies that acquired assets for ₦400 billion but have yet to significantly boost electricity generation, which continues to fluctuate between 2,000 and 5,000 megawatts.
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