FG targets 2027 to clear Gencos’ legacy debts, says Tegbe

The Federal Government has pledged to clear outstanding legacy debts owed to power generation companies (Gencos) by 2027, following the settlement of N1.23 trillion through bonds, as it seeks to restore investor confidence and strengthen the financial sustainability of the electricity market.

Minister of Power Joseph Tegbe disclosed this at the Harvard Business School Association of Nigeria (HBSAN) Energy Conference in Lagos, reaffirming the government’s commitment to improving electricity supply and addressing persistent financial challenges across the power sector.

Tegbe said the remaining legacy obligations would be settled next year, while the government was taking steps to prevent fresh arrears from accumulating.

He explained that clearing the outstanding debts was critical to restoring confidence among power operators, attracting fresh investment and improving electricity supply to households and businesses.

The minister said the government’s objective went beyond settling historical obligations to establishing a financially sustainable electricity market capable of supporting long-term investment and improved service delivery.

He also stressed the need to protect vulnerable consumers as reforms designed to strengthen the sector’s finances and improve electricity supply continue.

According to him, the government is pursuing measures to optimise available electricity generation capacity while addressing financial bottlenecks across the power value chain.

The planned settlement is expected to ease some of the financial pressure on generation companies, whose receivables have constrained their ability to meet operational and investment needs.

However, preventing fresh arrears will remain critical to the success of the intervention, as continued accumulation of unpaid obligations could undermine the benefits of the proposed clearance and weaken confidence in the sector.

The government’s ability to meet the 2027 deadline and sustain timely payments across the electricity value chain will therefore be central to improving the financial health of the power sector and delivering more reliable electricity to consumers.