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

Power Generation Companies Issue Ultimatum to Federal Government

Nigeria’s Power Generation Companies (GenCos) have issued a stern warning to shut down operations due to mounting debts totaling N4 trillion owed by the federal government. The threat comes as the electricity sector faces severe liquidity challenges that threaten to collapse the national power grid.

Financial Crisis in Nigeria’s Power Sector

According to a statement from Col Sani Bello (rtd), Chairman of the Board of Trustees for Power Generation Companies, the sector is grappling with:

• N2 trillion debt for 2024 operations
• N1.9 trillion in legacy debts
• Only 40% payment of current invoices
• 35% revenue loss from technical and commercial inefficiencies

Impact on Electricity Generation

The financial crisis particularly affects:

• Gas power plants (85% of generation mix)
• Hydropower plants (25% of generation mix)

Industry experts warn that continued underpayment makes it impossible to maintain aging infrastructure or attract new investments.

Government Response

Bolaji Tunji, Special Adviser to the Minister of Power, acknowledged the debt crisis, stating:

“The Minister of Power is very much concerned. The issue is being discussed with the Ministry of Finance, making a case for how the debt must be paid. We expect action soon.”

Potential Consequences

If GenCos follow through with their shutdown threat:

• Nationwide blackouts would occur
• The electricity value chain would collapse
• Economic activities would be severely disrupted

GenCos’ Demands

The power generators are calling for:

1. Immediate payment plans for outstanding invoices
2. 100% payment priority under the waterfall arrangement
3. Clear financing plans to address market exposures

For more details on this developing story, read the original report at Daily Trust.