Tunde Bakare
The Federal Executive Council (FEC) has received a proposal detailing how to offset huge debt owed to Power Generation Companies (GenCos).
The Minister of finance and coordinating Minister of the economy, Wale Edun, has confirmed he presented the proposal to the FEC, to enable the Federal Government clear the N4 trillion debt owed to power generation companies
Edun, spoke while briefing state house correspondents after the FEC meeting, presided over by President Bola Tinubu.
Edun said during the Council’s meeting, he presented a memo on refinancing outstanding obligations in the electricity industry totalling N4 trillion.
“I presented a memo on the all-important refinancing of the electricity sector’s outstanding obligations totalling N4 trillion,” the Minister said.
“Though the financing plan was not fully approved immediately, we have moved into implementation, led by the Debt Management Office and other experts.”
The Minister said the first phase of the process should be completed within three to four weeks, which will mark significant progress in resolving the debt.
Refinancing is when a loan is replaced with another one. This means paying off a debt with another debt obligation.
In April 2025, power generation companies (GenCos), warned that the N4 trillion unpaid debt owed by the Federal Government and stakeholders for electricity generated threatens their operations.
A breakdown of the debt includes N2 trillion for 2024 and N1.9 trillion in legacy debts.
Earlier in May, Power Minister, Adebayo Adelabu, said the Federal Government may consider borrowing to settle part of the N4 trillion debt owed to power generation companies (GenCos).
Edun said the Government is seeking $125 million from the Islamic Development Bank (IsDB) to fund infrastructure projects in Abia state.
He said the loan will finance the construction of about 35 kilometres of roads in Umuahia and 126 kilometres in Aba.
“In addition to our other priorities, I presented a memo on infrastructure support from the Islamic Development Bank totalling $125 million for Abia State,” the minister said.
Edun said this financing will enhance critical road networks connecting Umuahia and Aba, boosting transport efficiency and economic activities in the region