Power crisis: GenCos kick as Tinubu approves N3.3tn to clear legacy debt

After criticism by presidential candidate of the Labour Party in the 2023 election, Peter Obi, President Bola Tinubu has announced a plan to offset N3.3 trillion power sector legacy debt owed to generation companies.

A statement released on Sunday by presidential spokesperson, Bayo Onanuga, said the N3.3 trillion approved payment plan followed due verification of the country’s power sector legacy debt, which has lasted for more than a decade.

The approved payment plan is in addition to the existing pioneer N501 billion bond to settle legacy debt, which generation companies said has risen to N6 trillion.

“Following verification, N3.3 trillion has been agreed as a full and final settlement, ensuring a fair and transparent resolution.

“Implementation has begun, with 15 power plants signing settlement agreements totalling N2.3 trillion. The Federal Government has already raised N501 billion to fund these payments. Out of the amount, N223 billion has been disbursed, with further payments underway.

“What this means for Nigerians: With payments reaching the power value chain, generation will be more stable. With power plants supported, electricity reliability will improve.

“And as the sector stabilizes, more investment, more jobs, and better service will follow,” the statement said.

Commenting on the development, Olu Arowolo-Verheijen, special adviser on energy to President Tinubu, said, “This program is not just about settling legacy debts. It is about restoring confidence across the power sector—ensuring gas suppliers are paid, power plants can keep running, and the system begins to work more reliably.

“It is part of a broader set of reforms already underway, including better metering and service-based tariffs that link what you pay to the quality of electricity you receive.”

However, the Association of Power Generation Companies, APGC, has kicked against the development, saying the Federal Government slashed the legacy debt from N6 trillion to N3.3 trillion.

Reacting to the plan to offset the N3.3 trillion debt, Chief Officer of APGC, Dr. Joy Ogaji, asked, “Is verification unilateral in a bilateral agreement?”

DAILY POST reports that on Thursday Peter Obi lashed out at President Tinubu’s handling of the country’s power sector crisis.

According to him, the country’s persistent power sector crisis indicates unfulfilled promises by the President, referencing Tinubu’s electoral promises.

Recall that Nigerians have continued to experience epileptic power supply nationwide for months without any sign of improvement.

Tinubu, as part of his campaign promises, had said he would fix power supply within four years. However, over two years into his administration, the electricity supply crisis has persisted.

Power crisis: GenCos kick as Tinubu approves N3.3tn to clear legacy debt