Federal Government Begins Repayment of Power Sector Debts
The Federal Government has commenced repayment of longstanding debts owed to electricity generation companies, marking what industry players describe as a major breakthrough in efforts to resolve liquidity challenges in Nigeria’s power sector.
The President and Group Chief Executive Officer of Transnational Corporation Plc (Transcorp), Owen Omogiafo, disclosed this on Friday in Abuja during an interview with journalists on the sidelines of the company’s 20th Annual General Meeting.
Omogiafo said the repayment process represents the most significant progress yet in addressing the sector’s historical debt burden, which has weighed heavily on power generation companies.
According to her, settlement agreements have already been signed between the Federal Government and Transcorp’s power subsidiaries, with payments to some companies already underway, while others are expected to commence before the end of the year.
“For us in Transcorp Power and Transafam, we have actually signed our settlement reconciliation contracts. For Transafam, they started the payments. And for Transcorp Power, they will start sometime this year,” she said.
She commended the administration of President Bola Tinubu for initiating the reforms, describing the development as a turning point in addressing legacy debts in the electricity sector.
“This is the greatest progress we have made as it relates to dealing with the historical debt,” she added.
The Federal Government recently approved a ₦3.3tn settlement plan to clear verified debts owed to power generation companies and gas suppliers, accumulated between 2015 and 2025. The initiative is aimed at improving liquidity and stabilising Nigeria’s electricity market.
Despite persistent challenges such as gas supply shortages and transmission constraints, Omogiafo said the Transcorp Group has continued to post strong performance across its energy portfolio.
“There will always be challenges. That’s just the reality. But it’s what you do with those challenges and how you create opportunities out of them,” she said.
She added that improved policy direction and reforms in the sector are beginning to restore investor confidence, while the group continues to expand its footprint in both power and hospitality.
Earlier, Transcorp Chairman Tony Elumelu praised the company’s performance, attributing its growth to better operating conditions and disciplined management.
He noted that the group’s dividend payouts have significantly improved over the years, moving from kobo-level returns to ₦2 per share, which he described as a reflection of sustained value creation for shareholders.
Financial results presented at the AGM showed that the group recorded a 33% increase in revenue to ₦544bn in 2025, while profit after tax rose by 44% to ₦135.9bn. Total assets grew to about ₦1tn, reflecting stronger capitalisation and improved investor confidence.
The group also reported operational gains in its power business, with increased generation capacity and improved gas supply contributing to higher output across its plants.