Nigeria’s Power Crisis Deepens as GenCos Warn of Shutdown Over N1.9 Trillion Debt
Nigeria’s Power Crisis Deepens as GenCos Warn of Shutdown Over N1.9 Trillion Debt
Nigeria’s power sector is on the brink of a major crisis as Generation Companies (GenCos) warn of imminent shutdowns over the Federal Government’s failure to settle outstanding subsidy debts amounting to N1.9 trillion.
Despite earlier commitments by President Bola Tinubu’s administration to address the sector’s financial instability, official records from the Nigerian Electricity Regulatory Commission (NERC) reveal that the government has only paid N371 billion, covering just 19.5% of the subsidy shortfall from 2024’s tariff deficits.
In a document obtained by Journalists shows that between January and November 2024, GenCos issued invoices totaling N2.7 trillion, but only N762.1 billion was paid—leaving an alarming N1.94 trillion gap. This translates to a 28.18% payment rate, signaling severe revenue collection inefficiencies.
A month-by-month analysis of payments paints a dire picture. Only 9.46% of a N256 billion invoice was paid in January. February saw just 9.29% of N208 billion settled, while March recorded 9.34% payment of N235 billion. April saw a temporary improvement with 40.91% of N213 billion paid. Payments fluctuated between 31.01% and 39.05% in the following months, with November reaching the highest settlement rate of 39.05%.
Despite gradual improvements, 26,160MW of generated power remains stranded due to inadequate funding. As of yesterday, only 3,900MW to 4,900MW was being generated by 24 power plants, far below the 6,000MW target set for Band A tariff increases.
In a letter addressed to Minister of Power Adebayo Adelabu and signed by Sani Bello, Chairman of the Board of Trustees of the Association of Power Generation Companies (APGC), highlights the gravity of the situation.
“NBET’s remittance to GenCos for electricity sold to DisCos was below 30 per cent, making it nearly impossible for GenCos to sustain operations.”
The letter, also copied to the Chief of Staff to the President, Central Bank Governor and NBET’s Acting Managing Director, calls for immediate approval of a mechanism to ensure 100% payment of GenCos’ invoices by NBET and the urgent settlement of outstanding market debts.
While the government allocated N450 billion in 2024 and N900 billion for 2025 to clear debts, industry experts warn that without a sustainable funding structure, power supply could collapse.
Adding to the crisis, GenCos have raised concerns over multiple taxation at federal, state, and local levels, warning that the burden could lead to electricity tariff hikes.
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A recent letter to the Financial Reporting Council of Nigeria (FRCN) condemned the financial impact of Section 33(1) of the FRC Act (Amended) 2023, which mandates levies based on turnover.
GenCos argue that despite struggling with unpaid debts, they are still required to pay 30% corporate tax, 3% education tax, newly introduced police tax, land use charges and other levies.
A February 2025 report from NERC warns that most power plants are operating on the verge of collapse, with no clear path to financial stability.
With unresolved debts, stalled subsidy payments, and excessive taxation, Nigeria’s power sector is facing its worst financial crisis yet, raising the risk of prolonged blackouts and higher electricity tariffs for consumers.
