On Wednesday, the Minister of Finance, Wale Edun, announced the Federal Government’s plan to settle an outstanding debt of N1.7 trillion owed to Generation Companies (GenCos) within the next 25 days.
News About Nigeria reports that this follows several pressures from the power generation companies on the Federal Government.
The GenCos raised alarm on Sunday over the imminent collapse of their operations following a huge debt of N2 trillion and an estimated funding gap of N1.7 trillion contained in the 2024 Multi-Year Tariff Order.
In a statement released, GenCos lamented that their operations are not swift due to the huge debt owed by the Federal Government.
“This huge debt outlay is now greatly inhibiting Gencos’ ability to meet their obligations to lenders, O&M operations, necessary maintenance, spare parts procurements, and employee-related obligations,” GenCos lamented.
The power generation companies had also threatened the Federal Government that they would halt operations if the FG failed to clear the unpaid invoices.
In response to their demands, the Minister of Finance, while presenting the Accelerated Stabilisation and Advancement Plan (ASAP), revealed that the FG has “developed and commenced implementation of a robust and achievable plan for the resolution of the N1.7 trillion sector liquidity issue by the end of June 2024.”
He further noted that “key power sector government stakeholders to work with Honourable Minister of Finance and Coordinating Minister of the Economy; Executive Chairman, Federal Inland Revenue Services (FIRS) and Governor, Central Bank of Nigeria (CBN) to execute alternative settlement methods such as bonds and promissory notes for verified legacy debts.”
