Power Generation Companies (GenCos) in Nigeria have issued a strong warning of a potential nationwide blackout, citing a staggering N4 trillion debt owed by the federal government and other market operators.
During a press briefing in Abuja on Monday, Rtd. Colonel Sani Bello, Chairman of the GenCos’ Board of Trustees, explained that the accumulating unpaid debts are severely crippling the companies’ ability to continue operating, and without immediate action, the entire power sector could face a complete shutdown.
Bello pointed out that while electricity is being generated and consumed in full, the GenCos are only receiving a fraction of the payments due to them—ranging from 9 to 11 percent of their invoices—while regulatory bodies and service providers are being fully compensated.
“The power generated by GenCos has continued to be consumed in full without corresponding payment. This situation has dire consequences for the GenCos and, by extension, the entire power value chain,” he said.
Of the total N4 trillion debt, approximately N2 trillion is owed for electricity generated in 2024, while N1.9 trillion consists of legacy debts.
Bello also criticized the N900 billion allocated to the power sector in the 2025 national budget, describing it as inadequate to settle outstanding debts or ensure the sector’s sustainable operation.
The GenCos also reported a dramatic decline in payment collections, with the rate falling below 30 percent in 2024, exacerbating the liquidity crisis and further impairing their ability to meet operational and financial obligations.
“The crises from cash liquidity are on the top burner and have reduced GenCos’ ability to continue to perform their obligations,” Bello added.
Further compounding the issue, the GenCos are grappling with soaring operational costs tied to foreign exchange rates, alongside limited access to dollars for essential imports.
Bello stressed the need for a specialized forex window or a stable dollar allocation option for GenCos to continue functioning properly.
In response to the growing crisis, the GenCos are calling on the federal government to urgently take action, including the full settlement of outstanding invoices, a reprioritization of the payment structure, and financial guarantees from institutions like the World Bank and AfDB.
“There is a need for a coordinated approach by all stakeholders to address the liquidity issue realistically and sustainably. This request requires urgent attention,” Bello stated.
As of the time of filing this report, Minister of Power, Adebayo Adelabu, has yet to issue a statement in response to the GenCos’ demands.
