Nigeria’s 23 power generation companies (GenCos), represented by the Association of Power Generation Companies, have raised alarm of a liquidity crisis, fueled by over N4 trillion in unpaid electricity bills, which threatens to shut down their operations.
In a statement released on Monday, signed by Chairman Col. Sani Bello (retd.), the GenCos warned that without immediate action, their power plants could cease functioning, destabilizing the national electricity supply.
The GenCos’ statement, titled ‘Over N4tn unpaid invoices threaten GenCos imminent shutdown’, detailed the dire financial straits they face.
They receive only 9-11% of their rightful payments, while other service providers in the Nigerian Electricity Supply Industry (NESI), such as those under the Nigerian Bulk Electricity Trading Plc, are paid 100% of their market invoices.
This imbalance, combined with operational hurdles and the absence of a solid government financing plan, has brought the power sector to the edge of collapse.
The companies emphasized that the persistent failure to pay for electricity generated and supplied to the national grid undermines their ability to meet obligations. “The crises from cash liquidity are on the top burner,” the statement noted, warning that the entire electricity value chain is at risk.
Government Debt Breakdown
Power Minister Adebayo Adelabu, in a February disclosure, confirmed the scale of the crisis. The Federal Government owes:
- N2 trillion to GenCos in legacy debt.
- N1.9 trillion to GenCos for 2024 electricity subsidies.
- N450 billion to electricity distribution companies (DisCos) for 2024 subsidies.
This totals over N4 trillion, a figure that continues to strain the sector’s viability.
The GenCos have appealed to the government and key stakeholders for swift intervention, cautioning that inaction could trigger national security issues due to an unreliable power supply.
“Immediate and expedited action” is essential, they urged, to avert a crisis that could leave Nigerians without steady electricity.
