The Federal Government has pledged to take necessary steps to clear the N4.7 trillion debt owed to power generation companies to prevent a nationwide blackout.
Stakeholders have raised concerns that some GenCos may be forced to shut down due to liquidity challenges unless the government intervenes urgently to settle outstanding payments.
In an interview, Minister of Power, Adebayo Adelabu, reaffirmed the government’s commitment to tackling the financial challenges facing power plants to ensure a stable electricity supply.
Speaking through his media aide, Bolaji Tunji, the minister stated that efforts are underway to pay power generation companies and gas suppliers.
With a debt of N4.7 trillion, GenCos are struggling to sustain operations, our correspondent has learned.
It was gathered that the Gas-fired thermal plants are the most affected, as they struggle to pay gas suppliers for feedstock.
Meanwhile, Transcorp Power recently expressed concern over a debt of about N650 billion for the electricity it generated, stating that liquidity challenges had stalled its expansion plans.
In December 2024, gas companies formally warned GenCos of an impending suspension of gas supply due to unpaid debts.
However, government intervention seemingly averted another nationwide blackout, like the one experienced in early 2024.
Generation companies are struggling to stay afloat due to the Federal Government’s failure to clear the N4.7 trillion debt, according to sources who preferred not to be mentioned due to the matter’s sensitivity.
The sources revealed that some GenCos report profits in anticipation of government payments, but the debt continues to grow daily.
Speaking recently, the CEO of the Association of Power Generation Companies, Dr. Joy Ogaji, stated that GenCos are struggling and urgently need practical solutions to ease their N4.7 trillion liquidity crisis.
“As for liquidity, Gencos are seriously suffering and urgently need pragmatic solutions to ease the liquidity crisis, totalling N4.7tn,” Ogaji stated.
Transcorp Plc’s President and Group CEO, Owen Omogiafo, stated that despite having an installed capacity of 2,000 megawatts, the company is generating only half due to liquidity challenges.
“For Transcorp Plc as a group, our installed capacity is 2,000 megawatts but available capacity today is about a thousand of that. Why? Is it because we don’t want to put in more? Is it that we don’t have the wherewithal to increase that? No!
“But when you look at the liquidity challenges that we’re facing, it’s interesting to know that Transcorp Group alone is owed about N650bn by the government.
“We’re owed about N650bn from the power that we’ve generated. So, if you look at it as an investor, I want to be able to do more. I want to run a sustainable business. But at the same time, we need to be able to ensure that there’s liquidity, and the money is coming back so I can continue to reinvest,“ Omogiafo said during a TV interview recently.
The Minister of Power earlier confirmed that the Federal Government owes electricity generation and distribution companies over N4 trillion.
He explained that N2 trillion is legacy debt to GenCos, while another N1.9 trillion is owed as part of the 2024 electricity subsidy. Additionally, DisCos are owed N450 billion for the same subsidy.
