GenCos Raise the Alarm as Power Sector Debt Hits ₦6.5trn
By Rachel Akper
Nigeria’s power sector debt has risen to about ₦6.5 trillion, the Association of Power Generation Companies (GenCos) has disclosed, warning that the mounting liabilities pose a serious threat to electricity supply and the stability of the industry.
The generation companies said the debt represents accumulated unpaid invoices for electricity generated and supplied to the national grid. They explained that payments from the same market have remained significantly below the cost of production, worsening liquidity challenges across the sector.
According to the GenCos, monthly invoices average about ₦280 billion, but only a fraction of that amount is typically settled. The shortfall, they noted, has made it increasingly difficult for operators to meet operational costs, service loans, and invest in infrastructure upgrades.
The companies warned that if urgent steps are not taken to address the liquidity crisis, the total debt could rise to about ₦8.8 trillion by the end of 2026.
The Federal Government had previously intervened through financial support mechanisms, including bond issuances aimed at settling part of the outstanding obligations. However, industry stakeholders argue that the interventions have not been sufficient to clear the backlog or resolve structural inefficiencies in the electricity market.
Meanwhile, the Nigeria Labour Congress (NLC) has questioned the debt claims, calling for greater transparency and detailed disclosure of financial records within the sector.
The union maintained that accountability must accompany any move to inject further public funds into the industry.
Energy analysts warn that unresolved debts could further weaken investor confidence and aggravate persistent power shortages affecting homes and businesses nationwide.
Stakeholders are now calling for comprehensive reforms to address market shortfalls, improve revenue collection, and ensure financial sustainability across the electricity value chain.
