- The federal government owes GenCos ₦2 trillion for power supplied in 2024 and ₦1.9 trillion in legacy debts.
- Other market participants’ inability to meet their respective Distribution-Linked Indicators has dampened Gencos’ expectations of settlement through external support.
Nigeria’s electricity generation sector teeters on the brink of collapse as power generation companies (GenCos) threaten to shut down operations due to ₦4 trillion debt owed by the federal government. This debt comprises ₦2 trillion for power supplied in 2024 and ₦1.9 trillion in legacy debts.
The GenCos, under the Association of Power Generation Companies (APGC), expressed that they receive less than 30% of their monthly invoices for power supplied to the national grid. This chronic underpayment hampers their ability to maintain operations and threatens the entire electricity supply chain.
In a statement by APGC’s Board of Trustees Chairman, Colonel Sani Bello (retd), the GenCos decried the Federal Government’s failure to present a concrete financial intervention plan amid mounting operational and fiscal challenges.
They also highlighted that expectations of being settled through external support, such as the World Bank’s Power Sector Recovery Operation (PSRO), have been dampened due to other market participants’ inability to meet their respective Distribution-Linked Indicators (DLIs).
The GenCos called for immediate and expedited action to prevent national security challenges that may result from their inability to sustain steady electricity generation.
They urged the implementation of structured payment plans to settle all outstanding invoices, emphasising the need for a coordinated approach by all stakeholders in the Nigerian Electric Supply Industry (NESI) to address the liquidity issue realistically and sustainably.
As Nigeria grapples with this looming energy crisis, the potential shutdown of power generation companies could plunge the nation into darkness, exacerbating existing economic challenges and affecting millions of citizens.