The Minister of Power has pledged to tackle the N4 trillion electricity debt owed to Generation Companies, following threats of a shutdown by electricity Distribution Companies on Monday.
In response, the Minister’s Special Adviser, Bolaji Tunji, confirmed that the government is fully aware of the issue and is taking concrete steps to address it.
Tunji further stated that, as part of the government’s intervention, the Ministry of Finance will soon take charge of the payment of the N4 trillion debt.
The media aide responding in a chat on Monday said, “We are not unaware of this debt arising from the FG’s commitment on subsidy. Part of the debts are legacy debts, which were on the ground before the Minister of Power assumed office.
“The Minister of Power has repeatedly harped on this, knowing the implication of such debts to the operations of the various power sector stakeholders, especially the GENCOs. The Minister of Power is very much concerned.
“The issue is being discussed with the Ministry of Finance, making a case for how the debt must be paid. We expect the Ministry of Finance to take action on this soon.”
A nationwide blackout appeared imminent as the 23 GenCos warned they could no longer guarantee steady electricity supply.
This comes amid a deepening liquidity crisis in the electricity market, with outstanding debts surpassing N4 trillion—including N2 trillion for power supplied in 2024 and N1.9 trillion in legacy debts.
The GenCos say the mounting debt threatens their ability to continue operations.
The firms, under the aegis of the Association of Power Generation Companies, raised the alarm in a statement issued on Monday and signed by the Chairman of the Board of Trustees, Col. Sani Bello (retd.).
The GenCos warned that the debt burden and ongoing operational constraints could lead to the imminent shutdown of power plants if urgent government interventions are not made.
They revealed that they are currently receiving less than 30% of their monthly invoices for power supplied to the national grid, making it increasingly difficult to sustain operations.
The power generation companies also accused the Nigerian Bulk Electricity Trading Plc and other key stakeholders of sidelining them in the implementation of the “waterfall arrangement” used in the Nigerian Electricity Supply Industry.
According to the them, while other service providers are paid 100% of their market invoices, they receive only 9% to 11% of their entitlements, worsening their financial woes and threatening continued operations.
The statement read, “The Power Generation Companies (‘GenCos”) 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, which is currently threatening the continued operation of their power generation plants.
“Against the backdrop of the many challenges facing the power sector in Nigeria, 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.
“In light of the severity of the issues highlighted above, the GenCos are requesting that immediate and expedited action be taken to prevent national security challenges that may result from the failure of the GenCos to sustain steady generation of electricity for Nigerians.”
Recall that in February, the Minister of Power, Adebayo Adelabu, revealed that the government owes over ₦4 trillion in electricity subsidies to both generation (GenCos) and distribution companies (DisCos).
He explained that ₦2 trillion is owed to GenCos as legacy debt, while an additional ₦1.9 trillion is for the 2024 electricity subsidy. DisCos, on the other hand, are owed ₦450 billion for subsidies in 2024.
