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Daniel Adaji
Power Generation Companies (GenCos) in the country on Monday warn of an imminent nationwide blackout as unpaid debts from the Federal Government and other market operators hit over N4tn.
The companies say the mounting liabilities are crippling their ability to operate and threatening a total shutdown of electricity generation in Nigeria.
Chairman, Board of Trustees of the GenCos Col. Sani Bello (Rtd.), disclosed this to journalists in Abuja on Monday.
“The power generated by GenCos has continued to be consumed in full without corresponding full payment. This situation has dire consequences for the GenCos and, by extension, the entire power value chain,” he said.
Of the N4tn owed, N2tn is for electricity generated in 2024, while N1.9tn represents legacy debts.
GenCos say the 2025 national budget’s N900bn allocation for the power sector is grossly inadequate to address these arrears and sustain future payments.
Bello described the situation as “a clear departure from existing terms of the Power Purchase Agreement,” adding that under current conditions, GenCos only receive about 9–11 per cent of their invoices, while regulatory bodies and other service providers are paid in full.
The GenCos also highlight the sharp decline in collection rates—below 30 per cent in 2024—which they say has worsened the liquidity crisis.
“The crises from cash liquidity are on the top burner and have reduced GenCos’ ability to continue to perform their obligations,” he said.
Further compounding the issue are operational costs denominated in U.S. dollars and limited access to forex.
“The importance of a specialised window or stable dollar allocation option for the GenCos cannot be overemphasised,” Bello said.
The GenCos are demanding urgent government action, including full settlement of outstanding invoices, reprioritisation of the waterfall payment structure, and guarantees backed by institutions like the World Bank and AfDB.
“Ta there is needed for a coordinated approach by all stakeholders in the NESI to address the liquidity issue realistically and sustain. This request requires urgent attention,” he added.