Power generation companies (GenCos) in Nigeria have raised the alarm over an imminent shutdown of electricity plants across the country due to a staggering N4trillion debt owed by the Nigerian government.
In a statement issued by Colonel Sani Bello, the Chairman of the Board of Trustees of the Association of Power Generation Companies (APGC), on Monday, the GenCos disclosed that they are currently owed N2trillion for electricity supplied in 2024 and an additional N1.9 trillion in legacy debts.
The companies lamented that they receive less than 30% of their monthly invoices for power supplied to the national grid, severely hampering their ability to sustain operations.
“The power generation companies have continued to bear the brunt of the liquidity crisis in the Nigerian Electricity Supply Industry (NESI).
“Despite significant investments and efforts to ramp up capacity, GenCos face systemic constraints, unfriendly policies, and mounting debts without a clear repayment plan. The absence of firm contracts and a securitized market has further complicated financial planning,” the statement read.
The GenCos warned that the liquidity crisis could trigger a total collapse of the electricity value chain, leading to widespread blackouts.
“The 2024 collection rate has dropped below 30%, and 2025 is not any better, severely affecting GenCos’ ability to meet financial obligations.”
According to the statement, other challenges include high corporate taxes, regulatory fees, and foreign exchange volatility, which have further strained revenues.
The companies noted that despite supplying electricity in full, they are not being fully paid, even with the Partial Activation of Contracts in NESI since July 2022.
The GenCos urged the Nigerian government to take immediate action to prevent a total shutdown, which could escalate into a national security crisis.
They highlighted that the N900billion allocated for the power sector in the 2025 budget is insufficient to cover existing debts and future payments.
“The flow of money within the power industry remains a fundamental problem preventing Nigerians from enjoying stable electricity,” the statement emphasised.
The GenCos called for the implementation of a structured payment plan, including cash settlements, financial instruments, or debt swaps, to avert a total collapse of power generation in the country.
