By Abiola Olawale
Nigeria teeters on the edge of a nationwide blackout as power generation companies (GenCos) in the country have warned of an imminent shutdown due to a N4 trillion debt allegedly owed by the federal government.
Chairman of the Board of Trustees of the GenCos, Colonel Sani Bello( rtd) who made the threats known to journalists in Abuja on Monday, lamented that the GenCos, responsible for producing the bulk of Nigeria’s grid power, are receiving as little as 9-11% of their invoiced payments.
He said this shortfall, coupled with a lack of a clear repayment plan from the government, has left power plants struggling to cover operational costs, procure gas, and maintain infrastructure.
He asserted: “The power generated by GenCos has continued to be consumed in full without corresponding payment.
“This situation has dire consequences for the GenCos and, by extension, the entire power value chain.”
Of the N4tn owed, N2tn is for electricity generated in 2024, while N1.9tn represents legacy debts, Bello confirmed.
Bello described the situation as “a clear departure from existing terms of the Power Purchase Agreement.”
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 US 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.
