Nigeria’s power generation companies (Gencos) have raised alarm over the potential collapse of the country’s power sector due to a ballooning debt burden, now totaling N5.2tn.
The Gencos said their longstanding patriotic commitment to keep generating electricity despite non-payment is no longer sustainable.
In a statement on Monday, the Chief Executive Officer of the Association of Power Generation Companies (APGC), Dr Joy Ogaji, warned that the sector faces imminent breakdown unless the Federal Government urgently addresses the worsening liquidity crisis.
She revealed that Gencos are currently owed over N4tn—comprising N2tn in unpaid 2024 invoices and N1.9tn in legacy debts dating back to 2015.
An additional N1.2tn has accrued in the first half of 2025 alone, with no payment plan or financial intervention in sight. Monthly invoices from the Gencos now average N250bn, while the 2025 federal budget allocates just N900bn—an amount Ogaji said is yet to be backed by actual funds.
“Gencos have remained patriotic to the national cause, but patriotism alone cannot fuel machines or keep the lights on,” Ogaji stated, lamenting the deepening debt and flawed subsidy assumptions that have informed recent electricity tariff reviews.
She noted that in the absence of viable financial solutions such as cash injections, debt swaps, or market reforms, Gencos have been forced to secure alternative funding outside the electricity market to cover gas supply and other critical services needed to keep the grid operational.
“Continued investment in capacity expansion now presents heightened risks, including machine breakdowns and increased maintenance costs—challenges that urgently need to be addressed,” Ogaji warned.
She also criticized the planned reduction of Band A electricity tariffs by the Nigerian Electricity Regulatory Commission, from N209 to N160 per kilowatt-hour starting August 1. Ogaji argued that the move is based on questionable subsidy assumptions and could further destabilize an already fragile sector.
Reacting to the concerns, Minister of Power Adebayo Adelabu, through his media aide Bolaji Tunji, acknowledged the severity of the debt situation, now exceeding N5tn.
He confirmed that the minister has escalated the issue to the relevant authorities and that efforts are underway to begin settling a portion of the outstanding debt.
“I know the minister is concerned and has raised the issue at the appropriate quarters. Efforts are presently being made to ensure part of the debt is defrayed,” Tunji said in an interview with reporters on Monday.
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However, he did not specify a timeline for payments, stating only that the process is ongoing.
