Nigeria may witness a prolonged national blackout, with consequent socio-economic, industrial, and business losses, if the threat issued by the Association of Power Generation Companies (APGC) is not urgently addressed.
The APGC, which comprises 23 power generation companies in the country, warned in a statement on Monday that the electricity generation companies can no longer guarantee a steady power supply if the debts owed to them remain unpaid.
The statement, signed by the Chairman of the Board of Trustees, Sani Bello, lamented that the companies are currently enmeshed in a deep liquidity crisis, owing to the non-payment of over N4 trillion by key players in the power value chain.
According to the GenCos, the debt burden and operational constraints could force the imminent shutdown of power plants unless urgent intervention is implemented.
They warned that the continued non-payment for electricity already generated and consumed on the national grid is pushing Nigeria’s power sector toward total collapse.
The statement, titled “Over N4tn Unpaid Invoices Threaten GenCos’ Imminent Shutdown”, reads in part: “The Power Generation Companies (GenCos) are constrained to issue this press release to draw the attention of the Federal Government and key stakeholders to the need to urgently address the issue of inadequate payment for electricity generated by them and consumed on the national grid, which is currently threatening the continued operation of their power generation plants.”
The GenCos further alleged that despite generating power consumed nationwide, they receive only 9 to 11 per cent of what is due to them, while other service providers within the Nigerian Electricity Supply Industry (NESI) reportedly receive 100 per cent of their market invoices.
They criticized the Nigerian Bulk Electricity Trading Plc and other stakeholders for neglecting the GenCos in the application of the NESI’s “waterfall arrangement” — a financial settlement model.
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They also accused the Federal Government of lacking a clear financing plan, noting worsening fiscal and operational constraints within the industry.
The Minister of Power, Adebayo Adelabu, had in February disclosed that the government owes power generation and distribution companies over N4 trillion in electricity subsidies.
According to him, N2 trillion is owed to GenCos as legacy debt, while another N1.9 trillion is part of the 2024 electricity subsidy.
He also stated that DisCos are owed N450 billion for the same period.
Reiterating the urgency of the situation, the GenCos added: “Against the backdrop of the many challenges facing the power sector in Nigeria, the crisis from cash liquidity is the most pressing and has crippled the ability of GenCos to fulfill their obligations. This threatens to completely undermine the electricity value chain.
“In light of the severity of the issues highlighted above, the GenCos are requesting that immediate and expedited action be taken to prevent national security challenges that may arise from the failure of the GenCos to sustain the steady generation of electricity for Nigerians.”
