President Bola Tinubu has sanctioned the disbursement of N2.8 trillion to electricity-generating companies (GenCos), representing the Federal Government’s validated debt for accumulated electricity subsidies dating back to 2010, sources within *The PUNCH* report.
This decision follows President Tinubu’s firm rejection of the GenCos’ initial claim of N6 trillion. Highly placed sources within the Presidency and the Federal Ministry of Power, familiar with the negotiations, confirmed to our correspondent on Sunday that the President has insisted on adhering strictly to the audited figure, refusing to exceed it by even a single naira.
The approval marks the culmination of several months of discussions and a comprehensive audit conducted jointly by the Ministry of Finance, the Nigerian Bulk Electricity Trading Plc (NBET), and the GenCos themselves. It also arrives shortly after the Nigeria Labour Congress (NLC) publicly accused the GenCos of attempting to pilfer the nation’s treasury through inflated claims.
While the GenCos initially sought N6 trillion, suggesting a federal bailout of N3 trillion, sources from both the Presidency and the power ministry, who requested anonymity due to a lack of authorization to speak publicly, told *The PUNCH* that President Tinubu mandated a rigorous audit of the operators’ claims before committing public funds. He reportedly likened the initial submissions to the inflated and fraudulent documentation that plagued the fuel subsidy scheme.
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“The GenCos approached the President last August, urgently requesting intervention to prevent shutdowns due to the longstanding legacy debt,” one source explained. “They claimed this debt, accumulated since 2010, amounted to N6 trillion. The President responded by acknowledging their claim but firmly stating that he would not simply accept their figure without verification.”
“He ordered a thorough audit to determine the accuracy of their invoices, emphasizing that he wouldn’t authorize the payment of N6 trillion solely based on their assertion. He drew a parallel with the fuel subsidy situation, where fraudulent documentation was rampant, used to illicitly extract funds from the government,” the source added.
According to the source, the GenCos had initially presented a claim of N4 trillion during the August meeting, but were instructed to undergo a further audit via the tripartite committee. “During the August meeting, their claim was N4 trillion. Subsequently, they were directed to conduct a more detailed audit. Nevertheless, the Federal Government will raise funds and issue a bond to settle the debt.”
The official further noted that while the audit proceeded, the Federal Government successfully raised N501 billion in January through a bond issued under the Presidential Power Sector Debt Reduction Programme. This bond witnessed full subscription from pension funds, banks, and asset managers.
“As a gesture of good faith during the audit, the President authorized the Federal Government to raise funds and issue a bond for partial payment. The initial tranche of this bond, amounting to N501 billion, was issued in January and has already been disbursed.”
“The President’s position was that while negotiations on the final amount were ongoing, and it was clear that the debt would exceed N2 trillion, an initial payment of N501 billion would demonstrate the government’s commitment to resolving the issue. This approach is similar to acknowledging a partial debt payment while disputing the total amount claimed,” the source elaborated.
The official further disclosed that the audit has now concluded, revealing a verified liability of N2.8 trillion – significantly less than the GenCos’ asserted N6.6 trillion. Dr. Joy Ogaji, Chief Executive Officer of the Association of Power Generation Companies, had cautioned in a recent television interview that the debt was increasing by approximately N200 billion per month.
“The President has now approved the audited amount of N2.8 trillion. This figure was presented to him for approval, and he has granted it. He has also made it clear that no additional funds beyond this approved amount will be disbursed. This N2.8 trillion represents the Federal Government’s accepted liability,” the source concluded.
