Power Generation Companies (GenCos) have issued a warning about a potential nationwide blackout if the federal government does not address an outstanding ₦4 trillion debt, sparking renewed concerns over the stability of Nigeria’s electricity supply chain.
In spite of completing their commitments to grow, the GenCos claimed in a statement released by Col. Sani Bello (rtd), Chairman of the Board of Trustees of the GenCos, that they are being hampered by worsening financial issues in the Nigerian Electricity Supply Industry (NESI).
“GenCos have continued to bear the brunt of the liquidity crisis… threatening to completely undermine the electricity value chain,” Bello stated.
“There’s no clear financing plan, firm contracts or market securitisation to sustain future planning.”
The companies, which account for the bulk of Nigeria’s power generation, claim that over ₦4 trillion is currently owed to them, comprising ₦2 trillion for services rendered in 2024 and ₦1.9 trillion in legacy debts.
However, only ₦900 billion has been earmarked in the 2025 federal budget, raising fears about the government’s ability to meet future obligations.
GenCos conditions
Nigerians are raging over the new electricity tariff and poor power supply.
The power producers are demanding an immediate payment plan, full prioritisation of GenCos’ invoices under the current “waterfall” market payment structure, and a financing mechanism to support recent regulatory orders.
GenCos also lamented the negative impact of Nigeria’s foreign exchange crisis on its operations. Many of its maintenance and operational needs are dollarised, further stretching its finances as naira depreciation worsens its access to essential inputs.
Adding to their woes, collection rates in 2024 have dropped below 30%, and 2025 figures appear similarly bleak. High taxes, concession fees, and new regulatory compliance costs are compounding the financial pressure, they said.
An industry expert, who spoke anonymously, revealed the government is currently paying only 40% of GenCos’ submitted invoices.
“In any business, when you only get 40% of what you’re owed, you’re not doing well. This isn’t sustainable,” the expert said, warning that a shutdown would plunge the country into darkness.
He added, “They’ve been patient, but they’re being owed since Fashola’s tenure as minister. The government must sit down with them to resolve this.”
FG reacts
Minister of Power, Adebayo Adelabu [Twitter:@BayoAdelabu]
The federal government has acknowledged the situation. Bolaji Tunji, spokesperson to the Minister of Power, said steps are being taken.
“Parts of the debts are legacy issues. The Minister is working with the Ministry of Finance to ensure they are paid,” he said.
Despite the guarantees, GenCos maintain that urgent action is required, cautioning that the country’s light switch and the whole power industry are at risk.
