GenCos Warn Of Imminent Shutdown Amidst Over N4 Trillion Electricity Debt Crisis

GenCos Warn Of Imminent Shutdown Amidst Over N4 Trillion Electricity Debt Crisis

Nigeria’s 23 electricity generation companies (GenCos) have issued a stark warning regarding the stability of the nation’s power supply, citing a growing liquidity crisis and mounting debts now exceeding N4 trillion.

In a statement released on Monday and signed by the Chairman of the Board of Trustees of the Association of Power Generation Companies, Col. Sani Bello (retd.), the GenCos stressed that the ongoing financial strain threatens the continued operation of their power plants, potentially leading to a complete shutdown if urgent measures are not taken…READ MORE…

They emphasized that persistent non-payment for electricity already generated and fed into the national grid is pushing the power sector toward total collapse. The statement, titled “Over N4tn Unpaid Invoices Threaten GenCos’ Imminent Shutdown,” highlighted the Federal Government’s failure to provide a sustainable financing plan, along with increasing fiscal and operational challenges within the Nigerian Electricity Supply Industry (NESI).

The GenCos also expressed frustration with the Nigerian Bulk Electricity Trading Plc (NBET) and other key players over their implementation of the NESI “waterfall arrangement.” According to the companies, this arrangement unfairly prioritizes payments to other stakeholders—some receiving up to 100 percent of their invoices—while GenCos are left with as little as 9 to 11 percent of what they are owed.

“The power generation companies (GenCos) are compelled to issue this statement to alert the Federal Government and relevant stakeholders to the urgent need to resolve the long-standing issue of inadequate payments for electricity supplied to the national grid,” the statement read.

It continued, “Given the numerous challenges confronting Nigeria’s power sector, cash flow constraints have emerged as a critical concern, severely impairing GenCos’ ability to fulfill their responsibilities and posing a serious threat to the integrity of the entire electricity value chain.”

The GenCos warned that unless swift action is taken, the inability to sustain electricity generation could escalate into broader national security risks.

This development follows a February disclosure by the Minister of Power, Adebayo Adelabu, who revealed that the Federal Government owes electricity generation and distribution companies over N4 trillion in subsidies. He stated that N2 trillion represents legacy debt owed to GenCos, while an additional N1.9 trillion relates to the 2024 electricity subsidy. Distribution companies (DisCos) are also reportedly owed N450 billion for the same period.