Power Generation Companies in Nigeria have raised the alarm over a looming nationwide blackout as the industry faces a deepening liquidity crisis, with unpaid debts now exceeding N4tn.
The firms, under the aegis of the Association of Power Generation Companies, APGC, issued a statement on Monday warning that the escalating debt burden and operational neglect could force an imminent shutdown of power plants across the country.
Signed by the Chairman of the APGC Board of Trustees, Col. Sani Bello (retd.), the statement described the situation as dire, noting that the continued non-payment for electricity generated and consumed on the national grid is driving the sector to the brink of collapse.
“The Power Generation Companies are constrained to issue this press release to draw the attention of the Federal Government and key stakeholders to the need to urgently address the issue of inadequate payment for electricity generated by them and consumed on the national grid,” the statement read in part.
The GenCos said the liquidity shortfall has significantly undermined their ability to maintain operations, warning that the electricity value chain is on the verge of total breakdown without immediate government intervention.
They also accused the Nigerian Bulk Electricity Trading Plc and other key stakeholders of systematically sidelining GenCos in the application of the sector’s “waterfall arrangement” — a payment structure that reportedly sees some service providers receive full market value for services rendered while GenCos are paid only a fraction of their entitlements.
“Other service providers receive 100 per cent of their market invoices while GenCos get as little as 9 per cent to 11 per cent of what is due,” the APGC lamented.
The group also criticised the Federal Government for failing to present a clear and sustainable financing framework for the Nigerian Electricity Supply Industry, NESI, despite worsening fiscal constraints and mounting obligations.
“In the 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 generation of electricity for Nigerians,” the statement warned.
This development comes two months after the Minister of Power, Adebayo Adelabu, disclosed that the Federal Government owes over N4tn in electricity subsidies.
According to the minister, N2tn is owed to GenCos as legacy debts, another N1.9tn is part of the 2024 electricity subsidy owed to the firms, while Distribution Companies (DisCos) are owed N450bn for the same period.
Stakeholders have repeatedly warned that the power sector’s liquidity crisis, if left unaddressed, could jeopardise economic productivity, public services, and national security.
Efforts to get a reaction from the Ministry of Power were unsuccessful as of press time.
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