GENCOS WARN N7TN FRESH DEBTS THREATEN POWER SECTOR RECOVERY

Electricity Generation Companies (GenCos) have warned that Nigeria’s power sector could face another major financial crisis, saying fresh debts estimated at ₦7 trillion may accumulate if urgent measures are not taken to address persistent payment shortfalls.
The power producers said the warning comes despite recent efforts by the Federal Government to reduce outstanding liabilities in the sector, including plans aimed at settling about ₦4 trillion in legacy debts owed to electricity generation companies.
According to the GenCos, the continued failure to fully pay for electricity generated and supplied to the national grid is creating severe liquidity challenges, making it difficult for operators to meet operational costs, maintain power plants, and invest in new infrastructure.
They cautioned that unless the recurring debt problem is addressed, the country’s electricity supply could deteriorate further, undermining ongoing reforms and threatening the recovery of Nigeria’s power sector.
The companies urged the Federal Government, regulators, and other stakeholders to implement sustainable financing mechanisms that would guarantee prompt payment across the electricity value chain and restore investors’ confidence.
GenCos also stressed that resolving the sector’s financial challenges is critical to improving electricity generation, attracting fresh investment, and ensuring reliable power supply for households and businesses nationwide.
They maintained that without decisive intervention, the growing debt burden could reverse recent gains in the electricity industry and hinder efforts to achieve a stable and sustainable power sector.