Nigeria’s power generation companies (GenCos) have issued a dire warning that the nation’s electricity supply is on the brink of collapse due to a worsening liquidity crisis, with debts owed to them now exceeding N4 trillion.
In a statement on Monday, the Association of Power Generation Companies, through its Chairman of the Board of Trustees, Col. Sani Bello (retd.), declared that the firms can no longer guarantee stable electricity generation.
“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. “This is currently threatening the continued operation of their power generation plants.”
According to the GenCos, the Nigerian Bulk Electricity Trading Plc and other stakeholders have consistently marginalized them under the sector’s “waterfall arrangement”, where they receive as little as 9% to 11% of their due payments while others enjoy full disbursement.
“The crises from cash liquidity are on the top burner and have reduced GenCos’ ability to continue to perform their obligations, thereby threatening to completely undermine the Electricity value chain,” the group added.
The companies are calling for immediate intervention, warning of potential national security risks if power plants begin shutting down.
In February, the Minister of Power, Adebayo Adelabu, revealed that the Federal Government owed GenCos N2 trillion in legacy debt and an additional N1.9 trillion in 2024 subsidy payments. DisCos are also owed N450 billion.
With the financial pressure mounting, GenCos say urgent government action is essential to prevent a full collapse of the power sector.