President Bola Tinubu has taken decisive steps to address the persistent power outages in the country by approving the gradual settlement of power sector debts amounting to over N3.3 trillion. The president took this initiative to alleviate financial burdens within the power industry and enhance stability in the sector.
Under this plan, approximately N1.3 trillion owed to power generating companies by the Federal Government will be cleared through a combination of cash injections and promissory notes.
Additionally, outstanding debts of about $1.3 billion (equivalent to N1.994 trillion at the current official exchange rate) owed to gas companies will be settled through a mix of cash payments and future royalties.
The Federal Government, as stated by the Minister of Power, Chief Adebayo Adelabu, has commenced payments towards the N1.3 trillion debt owed to power generating companies, with strategies in place to settle the remaining amount through promissory notes over a period of two to five years.
To tackle the issue of inconsistent payments leading to substantial gas debts and arrears to power generation companies, President Tinubu directed the Minister of Finance to promptly disburse N130 billion from the Gas Stabilisation Fund towards the N1.3 trillion owed to Gencos while the remaining balance will be settled gradually.
In addressing the legacy debts of $1.3 billion owed to gas producers, the government plans to utilize future royalties and income streams from the gas sub-sector.
