Nigerian Power Crisis: GenCos Threaten Nationwide Shutdown Over N4 Trillion Debt

Looming Blackout as Generation Companies Demand Immediate Payment

Nigeria’s Power Generation Companies (GenCos) have issued a stern warning to shut down operations nationwide due to a staggering N4 trillion debt owed by the federal government. The threat comes as the companies face severe financial strain that threatens to collapse the country’s electricity value chain.

Financial Crisis in Nigeria’s Power Sector

In a statement by Col Sani Bello (rtd), Chairman of the Board of Trustees for Power Generation Companies, the GenCos revealed they’ve been pushed to the brink after years of bearing the brunt of Nigeria’s electricity sector liquidity crisis. The companies cite:

• Unpaid invoices totaling N4 trillion (N2 trillion for 2024 and N1.9 trillion in legacy debts)
• Only 30% collection rate on 2024 bills
• Inadequate N900 billion allocation in 2025 budget
• 35% revenue loss from Aggregate Technical and Commercial losses

Systemic Challenges Crippling Operations

The GenCos highlighted multiple systemic issues plaguing the sector:

“Major operation and maintenance needs in the generation subsector are dollarized, yet access to forex remains problematic. High corporate income tax, concession fees, royalty charges, and new FRC compliance obligations are further straining our revenue,” the statement explained.

An anonymous industry expert warned: “Currently the government is only paying 40% of GenCos’ invoices. In any business, when you sell and only get 40%, you’re not doing well. If GenCos shut down, every Nigerian will be in darkness.”

Government Response and Potential Solutions

The GenCos have demanded:

1. Immediate payment plans for outstanding invoices
2. Reprioritization under the waterfall arrangement to ensure 100% payment
3. Clear financing plan for NERC’s Supplementary Order

Bolaji Tunji, Special Adviser to the Minister of Power, acknowledged the crisis: “The Minister is very much concerned. We’re discussing with the Ministry of Finance and expect action soon. Parts of these are legacy debts predating this administration.”

The situation remains precarious as Nigeria’s power sector struggles with aging infrastructure, investor reluctance, and mounting debts that threaten to plunge the nation into darkness.

Full credit to the original publisher: Daily Trust