The Federal Government has commenced negotiations with power Generation Companies (Gencos) to outline a repayment plan for the ₦4 trillion debt owed to them.

This was disclosed in a statement by Bolaji Tunji, Special Adviser on Strategic Communications and Media Relations to the Minister of Power, Chief Adebayo Adelabu.

Adelabu met with the Chairmen of the Gencos in Abuja, with discussions focused on averting a collapse of the nation’s power infrastructure.

According to the statement, Adelabu assured the Gencos that a substantial portion of the debt would be paid immediately, while the balance would be settled through promissory notes or other debt instruments. He also hinted at a forthcoming meeting between President Bola Tinubu and the Gencos’ leadership to accelerate the process.

“There’s an urgent need to make a significant cash payment upfront, followed by a structured plan using promissory notes,” Adelabu said.

He pledged that the debt would be cleared within six months using financial instruments. Adelabu also acknowledged that the government bears some responsibility for the sector’s challenges and promised reforms to address operational constraints.

He called for full liberalisation of the power sector and urged Nigerians to accept cost-reflective tariffs.

“Citizens must be willing to pay the true cost of energy consumed. While subsidies for the most vulnerable will remain, we cannot sustain blanket subsidies indefinitely,” Adelabu said.

The Gencos were led by Col. Sani Bello (Rtd), Chairman of Mainstream Energy Solutions and head of the Association of Power Generating Companies (APGC), who had earlier warned of the sector’s deteriorating financial state due to the unpaid debt.