Electricity generation companies in Nigeria have raised fresh concerns over what they describe as a deepening financial crisis in the power sector, warning that unpaid obligations by the Federal Government now total about ₦6.5 trillion and are placing severe strain on their operations.
The alarm was raised by Joy Ogaji, Chief Executive Officer of the Association of Power Generation Companies, during an interview on Arise Television. She said the mounting liabilities have continued to grow despite repeated assurances by government officials.
Brandspur Banking News Desk reports that the debt burden is largely linked to transactions involving the Nigerian Bulk Electricity Trader, which purchases electricity from generation companies and sells it to distribution companies. According to Ogaji, GenCos currently issue monthly invoices of about ₦280 billion for electricity supplied, but receive payments covering barely a fraction of that amount.
She disclosed that on average, less than 40 percent of monthly invoices are settled, leaving an estimated shortfall of about ₦200 billion every month. This persistent gap, she explained, has compounded liquidity challenges across the generation segment of the power industry.
Ogaji noted that outstanding obligations stood at roughly ₦4 trillion by the end of 2024, but have since escalated sharply. She said liabilities accumulated over more than a decade have pushed the figure to ₦6.5 trillion as of early 2026, describing the situation as unsustainable.
While acknowledging recent government interventions, including plans announced in December to raise ₦1.23 trillion by the first quarter of 2026 to offset verified arrears, Ogaji argued that the measures fall far short of what is required. She also criticised the issuance of a ₦501 billion bond under the Presidential Power Sector Debt Reduction Programme, saying it does little to reverse the debt spiral.
The APGC chief further recalled commitments made by Bola Tinubu during engagements with GenCos in 2025, where the president reportedly pledged approval for a ₦4 trillion settlement to clear legacy debts and stabilise the sector. She expressed disappointment that only a portion of that promise has been implemented.
According to Ogaji, the failure to comprehensively address the debt profile risks worsening power supply challenges, as generation companies struggle to meet operational costs, service loans, and maintain critical infrastructure. She warned that without decisive financial restructuring, the electricity value chain could face further disruptions.
The GenCos are now urging the Federal Government and sector stakeholders to urgently adopt concrete measures that will halt the accumulation of new debts while clearing outstanding obligations, insisting that the future of Nigeria’s electricity supply depends on prompt action.
