The Federal Government is making urgent moves to prevent a nationwide blackout as power generation companies (GenCos) threaten to shut down operations over a staggering N4 trillion debt.
The Minister of Power, Adebayo Adelabu, through his special adviser, Bolaji Tunji, assured Nigerians that the government is actively working to resolve the crisis. According to Tunji, the Ministry of Finance is expected to soon begin payments to address both the legacy and recent debts owed to GenCos.
The GenCos, under the Association of Power Generation Companies, sounded the alarm on Monday, warning that they can no longer guarantee stable electricity due to the worsening liquidity issues in the electricity market. Of the N4tn debt, N2tn covers 2024 power supply, while N1.9tn stems from long-standing obligations.
“The debt has reached a dangerous level,” said Col. Sani Bello (retd.), Chairman of the GenCos Board of Trustees. “Our plants are being paid less than 30% of monthly invoices, threatening a complete system shutdown if immediate action isn’t taken.”
They also accused key stakeholders, including the Nigerian Bulk Electricity Trading Plc, of sidelining them in the industry’s “waterfall arrangement”, a policy that prioritizes full payment to other service providers while GenCos get as low as 9–11% of what they are owed.
The GenCos stressed that despite fulfilling their contractual obligations and ramping up power generation capacity since the 2013 privatization, they have faced constant setbacks due to lack of firm contracts, poor policy enforcement, and persistent unpaid invoices.
Their hope of relief through World Bank-backed power reforms has also dimmed due to other electricity market players failing to meet required performance benchmarks.
Highlighting the risk to national security, economic growth, and public welfare, they called for urgent intervention, including full payment of outstanding debts through mechanisms such as cash settlements, financial instruments, or debt swaps.
Meanwhile, the Managing Director of the Niger Delta Power Holding Company (NDPHC), Engr. Jennifer Adighije, revealed that President Bola Tinubu has stepped in with plans to secure more funding to stabilize the power sector.
Speaking at the Energy Times Awards where she was honored as Young Achiever of the Year, Adighije said, “Once we secure sufficient cash flow, we’ll be able to procure more gas and boost generation. The president has promised interventions that will provide the necessary funding.”
She noted that under her leadership, the NDPHC has already restored two turbine units, contributing an additional 230MW to the national grid.
The ongoing power crisis has placed immense pressure on both generation and distribution companies, preventing them from settling debts with gas suppliers and scaling their operations. With the government’s 2025 budget allocating just N900 billion, many stakeholders are concerned about whether it’s enough to cover both arrears and future energy costs.
Unless concrete steps are taken urgently, experts warn that Nigeria could be headed toward a power collapse with severe implications for homes, businesses, and the economy at large.
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