President Bola Tinubu has approved the payment of N2.8trillion to power generation companies (GenCos) as the Federal Government’s verified liability for accumulated electricity subsidies dating back to 201.
This was as he rejected the ₦6trillion claim submitted by the operators, insisting he will not pay a Naira beyond the audited figure, according to highly-placed officials in the Presidency and the Federal Ministry of Power with direct knowledge of the negotiations at the weekend.
The approval followed months of negotiations and a tripartite audit involving the Ministry of Finance, the Nigerian Bulk Electricity Trading Plc, and the generation companies themselves. It also comes days after the Nigeria Labour Congress accused the GenCos of attempting what it called a “heist” of the national treasury.
The GenCos had demanded ₦6trillion and proposed ₦3trillion in the federal bailout. But multiple Presidency and power ministry sources who spoke on condition of anonymity due to the lack of authorisation to speak on the matter, revealed that the President had demanded a thorough audit of the operators’ claims before committing public funds, likening the initial submissions to the inflated documentation that characterised the fuel subsidy regime.
“The GenCos came here last August to meet the President, pleading that legacy debt doesn’t make them shut down. They said that legacy debt since 2010 is up to ₦6trillion. Now, the President told them, ‘That is your claim. You said the government owes you this much, but I’m not going to pay ₦6trillion just because you said the government owes you.
“We are going to audit. How did you arrive at that amount in your invoices?’ It’s just like the fuel subsidy. Everybody was just bringing fake documents just to make money off of the government”, one of the sources said.
According to the source, the GenCos had initially presented a claim of ₦4trillion during the August meeting with the President, but were sent back to subject their figures to further scrutiny through the tripartite committee. “They were claiming ₦4trillion in that meeting. Then he said they should go and do a further audit. However, the Federal Government is going to raise money and issue a bond to pay them”, the source said.
The official added that while the audit was ongoing, the Federal Government in January raised ₦501billion through a bond issued under the Presidential Power Sector Debt Reduction Programme, which recorded full subscription from pension funds, banks, and asset managers.
The power sector debt crisis dates back to the 2013 privatisation of electricity assets, when generation and distribution companies were sold for approximately ₦400bn. Since then, a combination of government-regulated tariffs that do not cover the full cost of generation, chronic liquidity shortfalls in the electricity market, and foreign exchange constraints has kept operators in a cycle of unpaid invoices.
A published analysis revealed that the accumulated debt, classified as an electricity subsidy, grew steadily as the gap between what consumers paid and what it cost to generate and deliver power widened. Recall that on April 3, 2024, the FG removed subsidies for Band-A customers only, increasing rates to ₦225/kWh, while Band B-E remained subsidised at the time.
It said the enforcement of differing tariffs for Band-A and Band-B users was meant to reduce the monthly subsidy burden, which at one point neared ₦500bn, and has since cut it by roughly half. On January 27, 2026, the FG said it raised a ₦501bn bond issued under the Presidential Power Sector Debt Reduction Programme.
Five GenCos signed settlement agreements with NBET, with a total negotiated value of ₦827.16bn to be paid in four phased installments. They include: First Independent Power Limited, Geregu Power Plc, Ibom Power Company Limited, Mabon Limited, and Niger Delta Power Holding Company Limited.
The NLC had fiercely opposed any large-scale payment to the operators, describing the privatisation as “a grand deception and a well-orchestrated robbery of the Nigerian people”, and questioning why companies that acquired national assets for ₦400bn should receive trillions in government support after failing to significantly improve generation capacity, which still fluctuates between 2,000 and 5,000 megawatts.
