There are reports that eight of Nigeria’s largest power generation companies, including Transcorp Power, Egbin Power, and Geregu Power Plc, have signed onto President Bola Tinubu’s N3.3 trillion debt settlement programme, a deal aimed at restoring liquidity to an electricity sector that has lurched from one financial crisis to the next for nearly a decade.


The agreement, which covers 15 power plants operated by six private companies and two state-owned entities, represents the most ambitious attempt yet by any Nigerian administration to clear the mountain of unpaid obligations that has strangled investment, crippled maintenance schedules, and kept the lights off for millions of Nigerians.


BusinessDay’s findings showed Egbin Power Plc, the country’s single largest generating station with an installed capacity of 1,320 megawatts spread across six units in Ikorodu, Lagos, is arguably the most significant name on the list.


Geregu Power Plc, which operates its flagship plant in Ajaokuta, Kogi State, and is one of the few generation companies listed on the Nigerian Exchange Group, also signed. So did two Transcorp-affiliated entities, Transcorp Delta, operating out of Ughelli, and Afam Power, which runs the Afam complex in Oyigbo, Rivers State, both units of Tony Elumelu’s Transnational Corporation group.


First Independent Power Limited, which operates four gas turbine plants across Rivers State with a combined installed capacity of 541 megawatts, is among the private sector participants. Mabon Limited, a privately held company running a hydropower concession in Gombe State, rounds out the private contingent.


On the public sector side, Niger Delta Power Holding Company, the most operationally complex entity in the deal, brings nine plants to the table, including facilities at Olorunsogo, Ihovbor, Omotosho, Alaoji, Calabar, Egbema, Gbarain, and Sapele.


Ibom Power Company, controlled by the Akwa Ibom State Government and operating a 190-megawatt simple-cycle gas turbine facility at Ikot Abasi, is the only state government-owned entity among the signatories.

Despite the signing of eight companies controlling fifteen generation plants, Joy Ogaji, chief executive of the Association of Power Generation Companies, said the figure circulating in government communications bears no resemblance to numbers agreed upon during the most recent formal reconciliation between power companies and state agencies, a process that concluded in March 2025.


“We need to understand how this N3.3 trillion was computed,” Ogaji said. “We don’t know how the government arrived at that figure. Does it represent the GenCos’ only invoices? Does it represent the GasCo? Does it cover 2015 to 2024? The questions are endless.”


Since the privatisation of Nigeria’s power assets in 2013, the electricity value chain has operated under a regime of chronic underpayment, where distribution companies collect less revenue than the cost of electricity they receive, passing a financial shortfall back up the chain to generators who, in turn, cannot pay their gas suppliers.


The result is a sector locked in a permanent liquidity crisis, with each participant owed money and owing money simultaneously.


Ogaji said the claims her members are presenting go well beyond simple unpaid invoices. They include capacity payments for plant availability, deemed capacity charges for the difference between power declared and power actually dispatched, foreign exchange differentials accumulated as the naira depreciated sharply, and supplementary charges linked to the unusual operational demands placed on equipment.


That last category has become particularly contentious. Some GenCos said the frequency of plant start-ups and shutdowns, triggered by instability in gas supply and transmission constraints, has climbed from roughly 20 times a year to more than 365, imposing extraordinary wear and maintenance costs that existing tariff structures do not compensate.

GenCos also point to uncollected VAT on gas supplied between 2013 and September 2021, and interest on outstanding payments calculated at the Nigerian Interbank Offered Rate plus four percentage points.


“The GenCos supply power via a power purchase agreement with all the terms as approved,” Ogaji said. “The outstanding falls into different categories, unpaid invoices for power generated and consumed from 2015 to date, capacities made available and tested by NBET annually, deemed capacity, forex differentials, supplementary charges associated with start-ups and shutdowns.”


She also raised questions about the role of NBET as the government’s primary data source for calculating the debt. “How can NBET be the only source? Invoice settlement is done by market operations; NBET only pays. The true figures can only emerge after a proper reconciliation.”


A senior government official familiar with the negotiations confirmed that President Tinubu had been skeptical from the outset about the scale of the claims, which some generating companies had put as high as N7 trillion.


The official said the President had made clear he would not accept unverified figures, and that the N3.3 trillion figure represents what the government considers a defensible, audited liability.


“The settlement programme is designed to restore the sector, not to reward accumulated claims that extend beyond verifiable service delivery,” the official said. “The job of the government and its responsibility is to balance fairness to operators with fairness to the Nigerian public.”


The official added that any disbursements would be conditional on generators fulfilling specific obligations: paying outstanding bills to gas suppliers, settling debts with other service providers, and committing capital to plant rehabilitation and capacity expansion. The government, the official said, intends to monitor how the funds are deployed.


“President Tinubu is committed to ensuring the agreed sum is settled within the agreed timeframe and also tied to deliverables on the part of the GenCos. It is not to go and buy the next private jet and yacht.”


For Ade Olaniyi, an independent power sector analyst, the path forward requires both sides to agree on a single, transparent set of numbers before any settlement can hold.


“There must be consistency in the figures being communicated to stakeholders,” he said. “Without a clear breakdown, it becomes difficult to align on any repayment framework or long-term solution.”


Nigeria generates roughly 4,000 to 5,000 megawatts of electricity for a population of more than 220 million people, a fraction of what comparable economies produce.


Resolving the sector’s debt overhang is widely regarded as a prerequisite for attracting the private investment needed to close that gap.