The Federal Government has pledged to resolve the over ₦4 trillion debt owed to electricity generation companies (GenCos), following warnings that the worsening liquidity crisis could force a nationwide power shutdown.
On Monday, electricity distribution companies (DisCos) threatened to down tools in response to unpaid invoices to GenCos, who supply power to the national grid. The GenCos, under the Association of Power Generation Companies (APGC), say they are being paid less than 30% of their monthly invoices, with total outstanding debts now exceeding ₦4 trillion—including ₦2 trillion for power supplied in 2024 and ₦1.9 trillion in legacy debt.
In a statement titled “Over ₦4tn Unpaid Invoices Threaten GenCos’ Imminent Shutdown”, the association warned that failure to act urgently could lead to power plant closures and the collapse of Nigeria’s electricity grid.
Responding to the development, Special Adviser to the Minister of Power, Bolaji Tunji, said the government is fully aware of the situation and is actively working on a resolution. He revealed that the Ministry of Finance will soon take over responsibility for the debt settlement.
“We are not unaware of this debt, which partly arises from the Federal Government’s subsidy commitments,” Tunji said on Monday. “Some of these debts predate the current minister’s appointment, but he has consistently pushed for their resolution due to the critical impact on GenCos and the entire power value chain.”
The GenCos accused key market players, including the Nigerian Bulk Electricity Trading Plc (NBET), of unfair treatment in the power sector’s “waterfall arrangement,” where other operators reportedly receive up to 100% of their payments while GenCos get as little as 9–11%.
They also cited operational constraints, lack of firm contracts, failure to enforce power purchase agreements, and delays in external support like the World Bank Power Sector Recovery Operation (PSRO) as critical challenges facing the sector.
“Despite investing heavily to ramp up generation since the 2013 privatisation, GenCos continue to operate under investor-unfriendly policies, with no bankable contracts or reliable financing plans,” the statement said.
The companies have now called on the Federal Government to implement a structured payment plan and address regulatory and tax burdens that are further squeezing their revenue.
Meanwhile, Managing Director and CEO of the Niger Delta Power Holding Company (NDPHC), Engr. Jennifer Adighije, confirmed President Bola Tinubu’s commitment to resolving the liquidity crisis. Speaking after receiving the Young Achiever of the Year award at the 2025 Energy Times Awards, Adighije said the president has promised financial support to boost gas supply for thermal power generation.
“The key issue in the power sector is liquidity. With sufficient cash flow, we can procure more gas and scale generation,” she said. “Mr. President has graciously promised cash-backed interventions to address this.”
Adighije emphasized that under her leadership, the NDPHC will continue to deliver on its mandate of scaling power generation, transmission, and distribution across the country. She was recognized for her role in restoring two turbine units that had been offline due to defects, adding 230MW to the national grid just months after her appointment.
As the power sector grapples with a liquidity crisis that has stifled growth and returns on investment, stakeholders warn that time is running out. Unless urgent action is taken to settle GenCos’ outstanding debts and ensure sustainable financing, the threat of nationwide blackouts could soon become a reality.
