Key Highlights
- Nigerian power generation companies (GenCos) face a N6.8 trillion debt burden.
- This debt has been accumulating since 2015 and grows by approximately N200 billion monthly.
- As of Tuesday afternoon, 16 out of 33 power plants were not supplying electricity.
- The Federal Government plans to raise N4 trillion to partially settle outstanding debts.
- Gas-fired plants, crucial for Nigeria's electricity, are struggling with unpaid gas supply bills.
A significant number of Nigeria’s power generation companies (GenCos) have ceased operations due to a mounting debt of N6.8 trillion. This financial strain is preventing them from maintaining essential equipment, securing gas supplies, and covering basic operational costs.
Joy Ogaji, Chief Executive Officer of the Association of Power Generation Companies (APGC), stated that the companies cannot maintain their machines due to inadequate funding, highlighting the severe cash flow crisis.
Industry figures reveal that as of the end of February, power generation companies were owed approximately N6.8 trillion. This debt has been accumulating since 2015 and continues to grow by roughly N200 billion each month. GenCos reportedly owe gas suppliers and transport service providers about 60% of what is owed to them, further straining the energy supply chain.
Gas-fired plants are responsible for nearly 70% of Nigeria’s electricity generation, making an uninterrupted gas supply vital. However, gas suppliers are increasingly hesitant to continue deliveries without payment assurances.
Operational data from the Nigerian Independent System Operator (NISO) indicates substantial underperformance in power generation. As of Tuesday afternoon, 16 out of 33 power plants were not supplying electricity. The remaining plants were collectively generating 3,705 megawatts. Nigeria's average generation has hovered around 4,000 megawatts for years.
The Federal Government has announced plans to raise N4 trillion from domestic capital markets to partially address the outstanding debts owed to power companies. This initiative aims to tackle a portion of the backlog dating back to 2015, though only a fraction of the targeted amount has been raised so far through phased bond issuances.
Industry stakeholders have welcomed the government's proposal, but concerns persist regarding the speed of implementation and its sufficiency in curbing the escalating debt.
In October 2025, Nairametrics reported that the Federal Government had finalized implementation frameworks for a N4 trillion government-backed bond to settle verified arrears owed to power generation companies and gas suppliers.
