Abuja — The Federal Government is actively seeking alternative financing instruments to resolve the ₦2 trillion legacy debt owed to electricity generation companies (GenCos)—a long-standing crisis choking Nigeria’s power sector.

Speaking at the Nigerian Electricity Supply Industry (NESI) Stakeholders Meeting in Abuja, Eriye Onagoruwa, who represented the Special Adviser to the President on Energy, acknowledged the urgent need to clear the debt burden and restore liquidity across the sector.

“We’re empathetic to what GenCos are facing,” she said. “Given current fiscal constraints, alternative debt instruments are being explored. The Coordinating Minister of the Economy and the Debt Management Office have expressed support, and internal approvals are underway.”

Liquidity Pressure Threatens Stability

The legacy debt has eroded GenCos’ capacity to sustain operations and undermined investor confidence. With rising inflation and limited capital flows, stakeholders say the sector needs urgent intervention to avoid a deeper crisis.

Onagoruwa stopped short of naming specific instruments or timelines but assured stakeholders that progress is being made. “Significant groundwork has been laid. I hope by the next NESI meeting, I’ll be able to share a clear update,” she noted.

States Power Up Under Electricity Act

Another key development at the meeting was Nigeria’s transition to state-managed electricity markets under the Electricity Act 2023. So far, eleven states have initiated the shift, with Enugu, Ondo, Ekiti, Imo, Oyo, Edo, and Kogi among the front-runners.

Stakeholders at the meeting called for targeted investment in capacity building, clearer regulatory frameworks, and streamlined investor engagement to drive a smooth decentralisation process.

Presidential Metering Push Gains Momentum

Onagoruwa also gave updates on the Presidential Metering Initiative, which aims to eliminate estimated billing by deploying over six million smart meters nationwide. “End users will not pay for the meters,” she confirmed.

Funding will be sourced from multiple channels including the Distribution Sector Recovery Program (DISREP), the Federation Account, and the Meter Asset Fund. Priority will be given to high-consumption Band A customers in the first phase.

“We’re working to streamline installer certification and ensure strong communication infrastructure for data reliability,” she added. The full rollout is slated to begin in Q4 2025, with active coordination already ongoing between DisCos, the Bureau of Public Enterprises (BPE), and the National Power Training Institute of Nigeria (NAPTIN).