Nigeria could soon face a nationwide blackout as power generation companies (GenCos) warn they may be forced to shut down operations over an outstanding N4 trillion debt owed by the federal government.
In a statement released Monday, Colonel Sani Bello, Chairman of the Board of Trustees for the Association of Power Generation Companies (APGC), said the GenCos are currently owed N2 trillion for electricity supplied in 2024 alone, on top of N1.9 trillion in legacy debts.
The companies say they receive less than 30% of payments for the electricity they supply to the national grid each month, making it increasingly difficult to stay afloat.
“The power generation companies are bearing the brunt of the ongoing liquidity crisis in Nigeria’s electricity sector,” the statement said. “Despite significant investments to increase capacity, GenCos are still struggling with systemic challenges, poor policy implementation, and a growing debt burden — all without a clear plan for repayment.”
They warned that if the financial pressure continues unchecked, it could lead to a total collapse of the power supply chain, resulting in blackouts across the country.
The GenCos noted that payment collections for 2024 have dropped below 30%, with no signs of improvement heading into 2025. They also highlighted other compounding issues, including excessive taxes, high regulatory fees, and currency instability, all of which are further eroding their finances.
Despite continuing to supply electricity since the Partial Activation of Contracts began in July 2022, the companies claim they are not receiving full compensation for their services.
They are now calling on the federal government to intervene urgently, warning that a shutdown could escalate into a national security crisis. The N900 billion budgeted for the power sector in 2025, they added, is nowhere near enough to address the problem.
To prevent a total collapse, the GenCos are urging the government to introduce a structured debt repayment plan — through direct payments, financial instruments, or debt swaps — and to implement broader reforms to stabilize the sector.