Nationwide Blackout Imminent as Power Companies Threaten Shutdown Over N4trn Debt Owed by FG
Power generation companies (GenCos) in Nigeria have issued a grave warning of an impending nationwide blackout, citing a massive N4 trillion debt owed by the federal government.
In a statement released on Monday by Colonel Sani Bello, Chairman of the Board of Trustees of the Association of Power Generation Companies (APGC), the GenCos disclosed that N2 trillion is owed for power supplied in 2024, in addition to N1.9 trillion in legacy debts that remain unpaid.
The companies expressed frustration over receiving less than 30% of the value of their monthly invoices for electricity delivered to the national grid, a situation they say is threatening their ability to continue operations.
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WHAT THEY HAD TO SAY
“The power generation companies are at the epicenter of the ongoing liquidity crisis plaguing the Nigerian Electricity Supply Industry (NESI),” the statement read. “Despite substantial investments to enhance capacity, GenCos are burdened by systemic challenges, unfavorable policies, and increasing debt—without any clear repayment framework.”
They warned that if the current financial distress persists, it could result in the total collapse of the power supply system, plunging the country into widespread blackouts.
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The GenCos revealed that payment recovery in 2024 has fallen below 30%, with no signs of improvement heading into 2025. They also pointed to additional pressures such as excessive taxation, steep regulatory charges, and volatile foreign exchange rates, all of which are deepening their financial woes.
Despite consistently generating power since the Partial Activation of Contracts in July 2022, the companies said they have not been adequately compensated.
THE PLEA TO THE FEDERAL GOVERNMENT
They called on the federal government to intervene urgently to avoid a total shutdown of power generation, warning that the fallout could pose a significant threat to national security. The GenCos also criticized the N900 billion allocated to the power sector in the 2025 budget, describing it as grossly insufficient.
To avert a crisis, they proposed the implementation of a structured debt repayment plan, including options such as direct cash payments, financial instruments, or debt swaps, to sustain the power generation industry and prevent a systemic collapse.
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