The 23 power generation companies in Nigeria have raised the alarm that they can no longer ensure a stable electricity supply due to a worsening liquidity crisis in the power sector, as outstanding debts owed to them have now surpassed N4 trillion.
Operating under the Association of Power Generation Companies, the firms made this known in a statement released on Monday, signed by the Chairman of the Board of Trustees, Col. Sani Bello (retd.).
The GenCos warned that the mounting debt burden and operational challenges could soon force a shutdown of power plants if urgent action is not taken.
They cautioned that the continued non-payment for electricity already generated and consumed from the national grid is driving the Nigerian power sector toward a complete collapse.
The statement, titled ‘Over N4tn Unpaid Invoices Threaten GenCos’ Imminent Shutdown’, expressed concern over the absence of a clear financing plan from the Federal Government. It also highlighted the growing fiscal and operational challenges within the Nigerian Electricity Supply Industry.
They also accused the Nigerian Bulk Electricity Trading Plc and other stakeholders of sidelining them in the implementation of the NESI’s “waterfall arrangement.”
According to them, while other service providers receive 100 per cent of their market invoices, GenCos are paid as little as 9 to 11 per cent of what they are owed.
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 the 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 Federal Government owes over N4 trillion in electricity subsidies to both generation and distribution companies.
He explained that N2 trillion is owed to GenCos as legacy debt, while an additional N1.9 trillion represents unpaid subsidies for electricity generated in 2024. DisCos, on the other hand, are owed N450 billion for their part in the 2024 subsidy.
