Nigerians May Experience Blackout As GenCos Threaten Shutdown Over Unpaid N4tn Debt

There is looming darkness in Nigeria as power generation companies threaten a showdown.

This is as unpaid debts from the federal government and other market operators surged to over N4 trillion.

Chairman of the Boardof Trustees of the GenCos, Rtd. Colonel Sani Bello, made threats known to journalists in Abuja on Monday.

GenCos lamented that the mounting liabilities were crippling their ability to operate and threatening a total shutdown of electricity generation in Nigeria.

“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,” he said.

Of the N4tn owed, N2tn is for electricity generated in 2024, while N1.9tn represents legacy debts.

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GenCos noted that the 2025 national budget’s N900 billion allocation for the power sector is grossly inadequate to address those 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 ppercent 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 percent 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.

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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.

GenCos added that they were demanding urgent government action, including full settlement of outstanding invoices, rreprioritizationof the waterfall payment structure, and guarantees backed by institutions like the World Bank and AfDB.

“There is a need for a coordinated approach by all stakeholders to address the liquidity issue realistically and sustainably. This request requires urgent attention,” he added.

The Minister of Power, Adebayo Adelabu, has yet to respond to the matter as of the time of filing this report.