With electricity-generating firms threatening a clash, Nigeria faces impending darkness.
This comes as the amount of outstanding debt owed to the federal government and other market participants has risen to more than N4 trillion.
Rtd. Colonel Sani Bello, the chairman of the GenCos’ Board of Trustees, warned reporters in Abuja on Monday about the dangers.
GenCos bemoaned how their operations were being crippled by the growing liabilities, which threatened to completely shut down Nigeria’s energy generation.
“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 N4 trillion outstanding, N1.9 trillion is for legacy debts, and N2 trillion is for power produced in 2024.
The N900 billion allotted for the electricity industry in the 2025 national budget, according to GenCos, is woefully insufficient to settle those arrears and support further payments.
Under the current circumstances, GenCos only receive around 9–11% of their bills, while regulatory agencies and other service providers are paid in full, Bello said, calling the scenario “a clear departure from existing terms of the Power Purchase Agreement.”
The GenCos also point to the precipitous drop in collection rates, which they claim has made the liquidity problem worse, falling below 30 percent in 2024.
“The crises from cash liquidity are on the top burner and have reduced GenCos’ ability to continue to perform their obligations,” he said.
Further compounding the issue are operational costs denominated in U.S. dollars and limited access to forex.
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“The importance of a specialised window or stable dollar allocation option for the GenCos cannot be overemphasised,” Bello said.
GenCos added that they were demanding urgent government action, including full settlement of outstanding invoices, reprioritisation of the waterfall payment structure, and guarantees backed by 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,” he added.
The Minister of Power, Adebayo Adelabu, has yet to respond to the matter as of the time of filing this report.
