Tinubu Cuts GenCos’ N6tn Claim to N2.8tn After Forensic Audit

Tinubu Cuts GenCos’ N6tn Claim to N2.8tn After Forensic Audit

President Bola Ahmed Tinubu has approved the payment of N2.8 trillion to Nigeria’s power generation companies (GenCos) following a forensic audit that slashed their initial N6 trillion claim by more than half.

Sources in the Presidency and the Ministry of Power said the approved figure represents the Federal Government’s verified electricity subsidy debt accumulated since 2010.

The President, however, rejected what officials described as inflated and unjustified claims, making it clear that no amount beyond the audited N2.8 trillion would be paid.

According to officials, Tinubu ordered a comprehensive review of the figures submitted by operators, citing concerns over past subsidy controversies.

The audit was conducted jointly by the Federal Ministry of Finance, the Nigerian Bulk Electricity Trading (NBET), and the GenCos. The exercise reportedly removed over N3 trillion from the original demand.

The development comes amid allegations by the Nigeria Labour Congress (NLC) that some operators were attempting to siphon public funds through exaggerated claims.

To address liquidity challenges in the power sector, the Federal Government earlier raised N501 billion through a bond issued under the Presidential Power Sector Debt Reduction Programme.

The bond was fully subscribed by pension funds, banks and asset managers, and the proceeds have already been disbursed.

Officials disclosed that an additional N600 billion to N800 billion is expected to be released between May and July, which would bring total payments to nearly half of the approved debt by mid-year. The outstanding balance is projected to be cleared within 12 to 24 months.

Government sources emphasised that the payment would not be unconditional. A substantial portion of the funds must be used to settle debts owed to gas suppliers, who have been widely blamed for recurring grid collapses and generation shortfalls.

GenCos are also required to invest part of the funds in infrastructure upgrades, with strict monitoring mechanisms put in place to ensure compliance.

Authorities said the conditions are aimed at preventing diversion of funds and guaranteeing measurable improvements in electricity generation and service delivery.

Nigeria’s electricity debt crisis dates back to the 2013 privatisation of power assets sold for about N400 billion. Since then, tariff constraints, foreign exchange volatility and persistent liquidity gaps have left the sector burdened with mounting unpaid invoices.

Government officials also claimed that the audit exposed underinvestment by some operators, accusing both generation and distribution companies of failing to sufficiently upgrade infrastructure, leaving many communities to fund transformer replacements themselves.

Meanwhile, five GenCos, including Geregu Power Plc and Niger Delta Power Holding Company Limited, have signed phased settlement agreements with NBET worth N827.16 billion.

Officials said the N2.8 trillion settlement is designed to clear verified legacy debts, stabilise gas supply, restore investor confidence and steer Nigeria’s electricity market toward long-term stability.