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Nigeria’s power generation companies (GenCos) have issued a warning: Unless the federal government urgently addresses a mounting ₦4 trillion debt, the country may be plunged into a nationwide blackout.
The alarm was sounded in a statement by Col. Sani Bello (rtd), Chairman of the Board of Trustees of the GenCos, who described the financial crisis as a major threat to Nigeria’s already fragile electricity supply chain.
“GenCos have continued to bear the brunt of the liquidity crisis… threatening to completely undermine the electricity value chain,” Bello said.
Despite meeting operational demands and expanding capacity, GenCos say they are being financially suffocated by a systemic lack of payments, a situation that is pushing the power sector closer to collapse.
The Breakdown: What’s Owed and What’s NotAccording to the statement, the ₦4 trillion debt comprises
₦2 trillion for power generated and supplied in 2024
₦1.9 trillion in legacy debts from previous administrationsHowever, the 2025 federal budget only allocates ₦900 billion toward these obligations, raising questions about the government’s ability—or willingness—to meet the rest.
What GenCos Are DemandingIn light of the crisis, GenCos are urging the federal government to:
Establish an immediate payment plan
Prioritise GenCos’ invoices under the current “waterfall” market structure
Create a sustainable financing mechanism to support recent regulatory ordersThe companies are also pushing for market securitisation and firm contractual frameworks to guarantee payments going forward.
Foreign Exchange and Rising CostsGenCos also highlighted the crippling impact of Nigeria’s forex crisis, noting that many of their maintenance and operational inputs are dollar-denominated.
As the naira continues to fall, accessing spare parts and services from abroad has become a major hurdle.
Compounding the problem are:
Low collection rates, which fell below 30% in 2024
New taxes, compliance costs, and concession fees that continue to pile upAn industry expert, speaking anonymously, said the government currently pays just 40% of submitted invoices.
“In any business, when you only get 40% of what you’re owed, you’re not doing well. This isn’t sustainable,” the expert warned.
“They’ve been patient, but they’ve been owed since Fashola’s tenure as Power Minister. Something has to give.”
The expert added that if the financial chokehold continues, GenCos may be forced to shut down operations—triggering a total grid collapse.
The federal government has acknowledged the debt, calling much of it a “legacy issue.” Bolaji Tunji, spokesperson to the Minister of Power, Adebayo Adelabu, said the ministry is working closely with the Ministry of Finance to clear the backlog.
“The Minister is aware and engaged. Efforts are ongoing,” Tunji said.
Still, GenCos say verbal assurances won’t keep the lights on. They are demanding immediate, concrete action.
Nigeria’s electricity sector has long struggled under the weight of poor infrastructure, inconsistent regulation, and chronic underpayment.
But with GenCos now openly threatening to halt production, the crisis may be entering its most dangerous phase yet.
“The entire power sector—and Nigeria’s electricity—hangs in the balance,” Bello concluded.
Without swift intervention, millions of Nigerians could be left in the dark, and the government could face another wave of public outrage over worsening power supply in Africa’s largest economy.
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