The move has raised fears of prolonged nationwide blackouts and further instability in the already fragile national grid.
Speaking with The PUNCH on Thursday, Dr. Joy Ogaji, Managing Director/CEO of the Association of Power Generation Companies (APGC), confirmed the development, warning that the situation could plunge the country into darkness if urgent steps are not taken.
Her warning comes just days after yet another national grid collapse, which left the entire country in blackout. Although partial restoration has since brought generation back to about 4,000 megawatts, many plants remain unable to operate at full capacity.
GenCos in Liquidity Trap
Ogaji revealed that the sector’s liquidity crisis has spiralled out of control. Between January and August 2025 alone, an extra ₦1.6 trillion debt piled up, pushing the total outstanding to ₦5.6 trillion.
She recalled that President Bola Tinubu had met with GenCos in July to discuss about ₦4 trillion in legacy and unpaid invoices. At the meeting, the president approved a ₦4 trillion bond programme in principle to address the liquidity gap but urged operators to exercise patience pending verification of claims.
“Almost two months after that meeting, there has been no follow-up engagement with the GenCos on how these debts will be settled,” Ogaji lamented.
According to her, nearly 60% of GenCos’ revenue goes to gas producers, meaning the mounting debt directly undermines gas supply to power plants.
Gas Supply Cuts Begin
Ogaji said suppliers have already started reducing deliveries, warning that without urgent intervention, electricity generation could grind to a halt.
“Gas suppliers have already started reducing supply. We also have critical maintenance works, spare parts to procure, and creditors no longer willing to wait for payments. They now prioritise those who pay promptly,” she said.
She also faulted the Federal Government’s ₦900 billion allocation to the power sector in the 2025 budget, saying it lacked cash backing and was “grossly inadequate” to address the sector’s debt overhang.
Concerns Over FG’s Promissory Notes
The APGC boss expressed skepticism about the government’s plan to issue promissory notes and bonds to settle the debts. She warned that unclear terms posed risks to investors, citing exposure to interest rate fluctuations, foreign exchange volatility, credit defaults, and refinancing pressures.
“GenCos cannot make concessions that jeopardize our obligations to creditors. Any breach of contractual terms by the government has ripple effects on our financial stability and investor confidence,” she stated.
Stakeholders Demand Action
Ogaji urged the Federal Government, Nigerian Electricity Regulatory Commission (NERC), Debt Management Office (DMO), and Nigerian Bulk Electricity Trading Plc (NBET) to urgently engage GenCos and provide a clear settlement framework.
“Patriotism alone cannot run power plants. Without urgent action, Nigeria risks another round of prolonged blackouts,” she warned.
Meanwhile, the Transmission Company of Nigeria (TCN) confirmed partial recovery of the grid, with generation climbing to nearly 4,000 megawatts on Thursday. But several plants remain under capacity, underscoring the fragility of the system.
Industry experts caution that unless the government resolves the liquidity crisis and secures steady gas supply, Nigeria’s electricity market could collapse further—crippling homes, industries, and the wider economy.
