Power generation companies (GenCos) in Nigeria have warned of an imminent shutdown of operations due to a massive ₦4 trillion debt owed by the Federal Government. According to the Association of Power Generation Companies (APGC), GenCos are currently owed ₦2 trillion for power supplied in 2024 and ₦1.9 trillion in legacy debts.
The companies claim that plants are being paid less than 30% of monthly invoices for power supplied to the national grid, severely affecting their ability to meet financial obligations. High corporate income tax, concession fees, royalty charges, and new FRC compliance obligations are further straining GenCos' revenue.
The APGC Chairman, Col. Sani Bello, stated that despite large-scale investments and commitment to ramping up capacities, GenCos are facing severe difficulties, including liquidity crisis, lack of firm contracts, and a market without securitization. The 2025 government budget allocates only ₦900 billion, raising concerns about its adequacy to cover arrears and future payments.
The GenCos are requesting immediate implementation of payment plans to settle all outstanding invoices, reprioritization of payments, and a clear financing plan to backstop exposures. If the situation is not addressed, it may lead to national security challenges and undermine the entire power value chain.
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