Nigeria’s power generation companies (GenCos) have issued a serious warning about an impending nationwide electricity shutdown, citing a staggering ₦4 trillion debt owed by the Federal Government for energy generated and supplied to the national grid.
In a statement released on Monday and signed by Sani Bello, Chairman of the Board of Trustees, Association of Power Generation Companies, the GenCos revealed that the debt includes ₦2 trillion accrued in 2024 and ₦1.9 trillion in legacy debts, posing a severe threat to the continued operations of their power plants.
The warning aligns with a previous declaration by Minister of Power, Adebayo Adelabu, who in February confirmed that the Federal Government owes both GenCos and DisCos over ₦4 trillion. Mr. Adelabu emphasized that the debt crisis is “crippling the sector, making it challenging for GenCos to perform optimally.”
In their statement, GenCos pointed to worsening liquidity issues in the power sector, stating that the financial crisis is now at the forefront of challenges facing the industry. According to the companies, cash flow constraints are significantly impairing their ability to meet operational obligations and are threatening the integrity of Nigeria’s electricity value chain.
They further noted that hopes for relief through external funding sources such as the World Bank PSRO have been disappointed due to other market stakeholders’ failure to meet performance metrics, particularly the Distribution-Linked Indicators (DLIs) under the Power Sector Recovery Program (PSRP).
In addition to liquidity constraints, Mr. Bello flagged currency access as a major obstacle, especially for GenCos that rely on foreign exchange for operation and maintenance.
“GenCos is of the position that there is a need for a coordinated approach by all stakeholders in the Nigerian Electric Supply Industry (NESI) to address the liquidity issue realistically and sustainably in the power sector so that Nigerians can have access to reliable electricity supply.”
He warned that without urgent action, the collapse of power generation could lead to broader national security concerns.
“The 2024 collection rate has dropped below 30 per cent, and 2025 is not any better, severely affecting GenCos’ ability to meet financial obligations. High corporate income tax, concession fees, royalty charges, and new FRC compliance obligations are further straining GenCos’ revenue.
“GenCos are currently owed about N4 trillion (N2 trillion for 2024 and N1.9 trillion in legacy debts). No possible solutions, including cash payments, financial instruments, and debt swaps are in sight,” Mr Bello said.
The GenCos are now urging the government and all relevant stakeholders to act swiftly to rescue the power sector from a potential collapse and ensure that reliable electricity remains accessible to Nigerians.
