Nationwide Blackout Threat as Power GenCos Warn of Shutdown Over ₦4 Trillion Debt
Power generation companies sound the alarm over mounting unpaid bills, say immediate government intervention is needed to avoid crisis.
Nigeria is on the brink of a nationwide blackout as power generation companies (GenCos) threaten to shut down operations due to an overwhelming ₦4 trillion debt owed by the federal government.
In a statement released on Monday, the Association of Power Generation Companies (APGC) raised serious concerns about the deepening liquidity crisis in the power sector. The group revealed that GenCos are owed over ₦2 trillion for electricity generated in 2024 alone, with another ₦1.9 trillion in legacy debt, bringing the total to nearly ₦4 trillion.
“The continued non-payment for electricity supplied to the national grid is threatening the very survival of power generation in Nigeria,” said Col. Sani Bello (Rtd.), Chairman of the APGC Board of Trustees.
Mounting Debt, No Solutions in Sight
The GenCos lamented that since the sector’s privatization in 2013, they have upheld their end of the deal by increasing generation capacity — despite facing systemic challenges and poor enforcement of power purchase agreements.
Yet, years later, payments remain irregular and insufficient. In 2024, collection rates reportedly dropped below 30%, with some GenCos receiving as little as 9–11% of invoice values.
“This is a complete departure from the terms outlined in our Power Purchase Agreements (PPA) with NBET,” the statement said.
The companies warned that no viable solutions — including direct payments, financial instruments, or debt swaps — have been proposed to settle the backlog.
External Funding Delays and Budget Shortfalls
The GenCos also expressed disappointment over delays in the disbursement of external financial support, such as the World Bank’s Power Sector Recovery Operation (PSRO). According to them, these funds have been withheld due to other stakeholders’ failure to meet performance benchmarks outlined in the Power Sector Recovery Program (PSRP).
To make matters worse, the ₦900 billion allocated to the power sector in Nigeria’s 2025 budget is deemed “grossly inadequate” to address the scale of the problem or cover future obligations.
A Looming Crisis with National Implications
With operational costs mounting and liquidity drying up, the GenCos have now issued a stern warning: if the government fails to act immediately, the nation could face a total collapse of electricity supply.
“This isn’t just a power issue — it’s a national emergency that threatens security, economic activity, and the day-to-day lives of millions of Nigerians.”
The GenCos have presented a list of urgent demands to the Federal Government and key stakeholders, emphasizing that immediate intervention is not just important — it is critical.
