GenCos are requesting that immediate and expedited action be taken to prevent national security challenges that may result from the failure of the GenCos to sustain steady electricity generation for Nigerians.
The electricity generation companies (GenCos) in Nigeria are on the verge of completely shutting down their operations as a result of an outstanding debt of roughly ₦4 trillion owed by the Federal Government.
These GenCos have stated that this debt is currently posing a threat to their operating operations. As a result of the debt, which includes both historical obligations and outstanding subsidies for the year 2024, the power sector is experiencing a significant reduction in its capacity to maximize its efficiency.
GenCos are currently due ₦2 trillion for power provided in 2024, as well as ₦1.9 trillion in legacy debts, according to the chairman of the Board of Trustees of the Association of Power Generation Companies (APGC), Colonel Sani Bello (retd), who disclosed this information.
Power plants are receiving less than 30% of their monthly billing for electricity delivered to the national grid, according to the corporations.
“The flow of money within the power industry is one of the fundamental problems preventing Nigerians from enjoying continued and sustainable improvements in electricity supply,” they said, urging the establishment of payment plans to pay off all outstanding GenCos invoices.
According to the company, the Nigerian Electricity Supply Industry (NESI) financial problem has persisted and GenCos have been hit the most.
“In light of the severity of the issues highlighted above, the GenCos are requesting that immediate and expedited action be taken to prevent national security challenges that may result from the failure of the GenCos to sustain steady electricity generation for Nigerians.
“GenCos, on their part, as responsible investors with patriotic zeal, have made large-scale investments and have continued to demonstrate absolute commitment by ramping up capacities in line with their contracts over the past 10 years, despite system constraints, policies and regulations that are not investor-friendly, increasing debts owed by the Federal Government without a clear financing plan, lack of firm contracts, and a market without securitisation, relying instead on best endeavours thereby hampering future planning.
“Notwithstanding these and other severe difficulties the GenCos have battled with since the takeover in 2013, they have adhered to the terms of their contractual agreements by increasing capacity, which has largely been constrained by systemic factors.
“The 2024 collection rate has dropped below 30 per cent, and 2025 is not faring any better, severely affecting GenCos’ ability to meet financial obligations.
“Tax and regulatory challenges including high corporate income tax, concession fees, royalty charges, and new FRC compliance obligations are further straining GenCos’ revenue. GenCos are currently owed about ₦4 trillion (₦2 trillion for 2024 and ₦1.9 trillion in legacy debts). No viable solutions, including cash payments, financial instruments, or debt swaps, are in sight.
“The 2025 government budget allocated only ₦900 billion, raising concerns about its adequacy to cover arrears and future payments.”