Nigeria’s power generation companies (GenCos) have issued a grave warning over the looming collapse of the national electricity supply, citing a crippling N4 trillion debt owed by the federal government as the cause.
In a statement released on Monday by Colonel Sani Bello (rtd.), Chairman of the Board of Trustees of the Association of Power Generation Companies (APGC), the GenCos revealed that they are currently owed N2 trillion for electricity supplied in 2024, in addition to N1.9 trillion in legacy debt from previous years.
Only 30% of Monthly Invoices Paid
The GenCos disclosed that they currently receive less than 30% of the value of their monthly invoices for electricity delivered to the national grid—an unsustainable shortfall that is now threatening to shut down power generation nationwide.
“Despite major investments and capacity expansion efforts, GenCos are being crippled by systemic issues, adverse policies, and mounting unpaid debts. There’s no clear repayment plan, and the lack of firm contracts or a securitized market only worsens the financial instability,” the statement read.
Warning of Total Collapse
The APGC cautioned that if immediate interventions are not made, the entire electricity value chain could collapse, potentially triggering widespread blackouts across the country.
“The collection rate in 2024 has fallen below 30%, and there’s no indication that 2025 will be any better. This is severely undermining our ability to meet basic financial obligations,” they added.
Other Pressures Strangling the Sector
In addition to the huge unpaid debts, GenCos are grappling with several other challenges:
High corporate taxes and regulatory fees
Exchange rate volatility
Inadequate budgetary allocations
They noted that despite fulfilling supply obligations under the Partial Activation of Contracts regime introduced in July 2022, payments remain far from adequate.
Call for Urgent Government Action
The GenCos emphasized that the N900 billion allocated to the power sector in the 2025 budget is insufficient to address existing debt and future obligations. They warned that if left unaddressed, the crisis could escalate into a national security threat due to a complete shutdown of power generation facilities.
“The fundamental issue remains the poor liquidity flow across the Nigerian Electricity Supply Industry (NESI), which continues to prevent stable and reliable electricity supply to Nigerians.”
Proposed Solution: Structured Debt Repayment
To avert the looming crisis, GenCos are calling on the federal government to implement a structured debt repayment plan. This could include:
Cash settlements
Use of financial instruments
Debt-equity swaps
They emphasized that such measures are critical to restoring confidence and ensuring continuous electricity supply in Nigeria.
Bottom Line: Without urgent and decisive action, Nigeria may soon face nationwide blackouts, as GenCos struggle under the weight of a multi-trillion-naira debt crisis that threatens the stability of the entire power sector.
