GenCos Warn of Imminent Shutdown Over N4trn Debt

Nigeria’s power generation companies (GenCos) have issued a dire warning, stating that electricity supply across the country is at risk of total collapse due to an overwhelming N4 trillion debt owed by the Federal Government.

In a statement released on Monday by Col. Sani Bello (retired), Chairman of the Board of Trustees of the Association of Power Generation Companies (APGC), the GenCos revealed that they are owed N2 trillion for electricity supplied in 2024 alone, alongside an additional N1.9 trillion in legacy debts dating back several years.

The GenCos disclosed that they currently receive less than 30% of their monthly invoices, putting them on the brink of operational failure.

“The GenCos have continued to shoulder the burden of the liquidity crisis within the Nigerian Electricity Supply Industry (NESI),” the statement read. “Despite massive investments and consistent commitment over more than a decade, we are now in a critical state.”

According to the APGC, numerous factors including non-investor-friendly policies, lack of firm contractual guarantees, and absence of a bankable securitization structure have severely restricted the sector’s ability to plan for the future or meet its financial obligations.

The group warned that the liquidity crisis is now the single most pressing threat to the viability of the entire power sector.

The situation has also been worsened by the inability of other stakeholders in the sector to meet key benchmarks in the Power Sector Recovery Program (PSRP), especially the Distribution-Linked Indicators (DLIs), which were prerequisites for accessing financial support from the World Bank.

“The 2024 collection rate has dropped below 30%, and the outlook for 2025 is equally grim. Tax burdens, regulatory pressures, and forex volatility are further weakening the GenCos’ operational capacity,” the statement added.

While the 2025 federal budget allocates only N900 billion to the power sector, stakeholders argue it falls far short of addressing both arrears and current needs. 

Meanwhile, GenCos continue to supply power that is fully consumed but not adequately paid for—despite policy measures like the Partial Activation of Contracts initiated in July 2022.

The APGC stressed that immediate action is needed, including the implementation of a comprehensive payment plan to liquidate outstanding invoices, if a national power collapse is to be avoided.

“The flow of funds in the power sector remains a fundamental bottleneck preventing Nigerians from enjoying reliable electricity,” they concluded.