The Association of Power Generation Companies (APGC) has warned that electricity debt owed by the federal government could reach N8.5 trillion by December if no concrete payment plan is implemented before year-end.
Speaking in an interview on Trust TV, APGC Chief Executive Officer Dr Joy Ogaji said the government currently allocates N250 billion monthly, or N2.5 trillion annually, in subsidies to the power sector. However, only about 35 per cent of this is actually made available to power generation companies (GenCos).
“One of the issues we are facing is liquidity and debt,” Ogaji said. “Its implication on our operations is that the debt profile runs to N2.4 trillion annually, and as of this moment, there is no clear financing plan other than projections, conjectures, and assumptions. So, assumptions cannot buy gas for us to generate.”
She disclosed that the government presently owes GenCos N6.5 trillion, with a plan to issue only N500 billion as a bond, leaving the remainder unpaid. “If we look at the growing debts, it’s around N2.4 trillion per annum. Last year it was N2.4 trillion, and if nothing is done, it is going to be N2.4 trillion this year. This will be N4.8 trillion when you add it to the one from December 2024 that is already N4 trillion. For that, we had a meeting with the President in July. He promised a N4 trillion bond, but then we started hearing stories that touched. So, if nothing is done, by December this year, we’re looking at 8.8 trillion,” she said.
Ogaji highlighted that power generation operations are largely dollar-denominated, creating additional strain. “Assumptions have been what the government has been giving to the GenCos, which cannot provide the dollarised operational maintenance cost and buy spare parts. I must inform you that over 90 per cent of power generation operations are dollarised. And we all know how difficult it is to access dollars. Dollars are not made available to the power sector to access officially. So, we have two problems here. One, we are not paid; even the 35 per cent they are paying, it comes whenever. You cannot even plan with it, and it is so inadequate.”
The APGC’s warning underscores ongoing financial stress in Nigeria’s power sector, where delayed payments and inadequate subsidies have hindered consistent electricity generation, threatening both supply stability and sector investment.
