THERE appears to be no end in sight to Nigeria’s current power sector liquidity problems, as the power generation companies (GENCOS) said the debt owed them by the Federal Government had risen to N5.6 trillion as of August 2025.
The Managing Director of the Association of Power Generating Companies (APGC), Joy Ogaji, stated this on Wednesday, September 10, in a monitored broadcast on Arise Television.
She disclosed that the liquidity crisis had been an existential threat to Nigeria’s power sector, a situation that has created lots of problems for most players in the sector’s value chain.
Ogaji revealed that there was also no clear financing strategy to deal with the sector’s liquidity problems, which have been compounding.
“Every month, the GENCOs’ invoice ends up in an average of N280 billion of power that is taken, not what they can generate. It is a huge problem. As of December 2024, the debt owed to us was N4 trillion, and that was the subject of our meeting with Mr. President. This is why we appeal for this payment, and this is not a subsidy; it’s for power consumed.
“As for 2025, I told you that there’s a monthly invoice of N280 billion. After deductions of the amount that’s not paid, you’re looking at a monthly average of N200 billion. From January till now, if you do the maths, it is N1.6 trillion in addition to the outstanding N4 trillion, which raises it to N5.6 trillion,” she added.
She disclosed that from 2013 to date, power had been increasing, but utilisation dropped to 3,500 megawatts from 4,000 megawatts, noting that for the 3,500 megawatts that are being utilised, only 35 per cent of that is paid for.
Ogaji said President Bola Tinubu was on the right track in meeting with GENCOs to discuss the way forward for sorting out their debts, but noted that two months later, there were no updates on the funding model to defray such debts despite assurances from the meeting held with the president.
“As a father, he promised to intervene immediately with a N4 trillion bond issuance after we had a meeting with him on July 25, 2025.
“Today is the 10th of September. We have not heard the outline plan for how this bond is being designed, what its scope is, or what the timeline for this bond is,” she disclosed further.
According to Ogaji, the N4 trillion debt does not belong entirely to the GENCOs, noting that some creditors in the gas value chain, such as the thermal plants, are also waiting for the money.
It would be noted that the rising debt has posed a challenge to strengthening the power sector for optimum service delivery.
The ICIR reported that the Federal Government promised to sort out the outstanding N4 trillion debt payment in two ways: part of it in cash, and the rest through promissory notes, which are legal documents that act as a promise to pay money at a later date.
Findings have also shown that Nigeria’s power sector has relied on interventionist funds from the World Bank and the African Development Bank (AfDB) to pull itself out of various liquidity crises, since sector’s privatisation in 2013.
There are several instances of World Bank support for the sector, including a $500 million loan in 2021 for the Nigeria Distribution Sector Recovery Program (DISREP), a $750 million facility approved in 2023 for the Power Sector Recovery Operation (PSRO) and Distributed Access through a Renewable Energy Scale-Up (DARES), and pledged support with 1.2 million meters in 2023 to address the metering gap.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.