FG Reduces Power Sector Liabilities as NELMCO Clears N2.16 Trillion Debt
The Federal Government has achieved a major milestone in reducing power sector liabilities, with the Nigerian Electricity Liability Management Company (NELMCO) successfully clearing over N2.16 trillion of debts inherited from the defunct Power Holding Company of Nigeria (PHCN). This development was announced during the inauguration of NELMCO's new headquarters in Abuja, marking a significant step towards restoring confidence and stability in Nigeria's electricity market.
Debt Resolution and Financial Impact
Mojoyinoluwa Dekalu-Thomas, Managing Director of NELMCO, disclosed that the agency inherited over N2.3 trillion in liabilities at its inception. Through rigorous verification, reconciliation, and negotiation processes, NELMCO has resolved the bulk of these obligations. The settlements include:
- Over N100 billion in direct payments to creditors.
- N700 billion in negotiated savings.
- Transfer of approximately N1.3 trillion to other Federal Government agencies.
- Nearly N1 billion written off.
Dekalu-Thomas emphasized that this clean-up of legacy debts has removed a major obstacle to investment in the sector. By insulating successor generation and distribution companies from these historical burdens, NELMCO has provided the financial breathing room necessary for DisCos and GenCos to focus on operations and service delivery. She stated, "For years, these liabilities were a dark cloud over the sector, discouraging investment and stifling growth. Today, we have transformed that challenge into a blueprint for success."
Government Commitment and Reform Agenda
Vice President Kashim Shettima, while commissioning the new headquarters, reiterated the administration's firm commitment to repositioning the electricity sector into a commercially viable, transparent, and investment-ready industry. He highlighted that energy security is central to national development and described the milestone as a demonstration of the government's dedication to institutional strengthening and sectoral stability.
Shettima noted that the government's reform agenda is anchored on data-driven decision-making, technology deployment, and stronger collaboration with local and international stakeholders. He said, "NELMCO represents our commitment to confronting the burdens of yesterday, so that they do not mortgage the possibilities of tomorrow." The Vice President called on private investors and international partners to engage with ongoing reforms, assuring them of a transparent and investor-friendly environment.
Broader Economic Implications
Wale Edun, Minister of Finance and Coordinating Minister of the Economy, highlighted that efforts to stabilize the power sector would have a direct positive impact on Small and Medium-sized Enterprises (SMEs) and overall economic performance. He mentioned ongoing initiatives, such as the establishment of the Grid Asset Management Company (GAMCO), as part of broader efforts to address structural inefficiencies in the sector.
Adebayo Adelabu, Minister of Power, added that the new headquarters reflects the Federal Government's commitment to strengthening liquidity in the electricity market and enabling NELMCO to efficiently manage legacy debts. Representing the Senate Committee on Power, Senator Oyelola Ashiru assured that the National Assembly would continue to provide legislative backing to support reforms, noting that the facility would reduce government spending on rent while improving operational efficiency.
This comprehensive debt clearance by NELMCO is expected to enhance investment flows, support economic growth, and deliver more reliable electricity to Nigerians, aligning with the Tinubu administration's broader objectives for the power sector.
