Nigeria’s electricity generation sector is facing renewed uncertainty as debts owed to power generation companies (GenCos) have climbed to nearly N7 trillion, with operators rejecting the Federal Government’s proposed settlement framework.
The Executive Secretary and Chief Executive Officer of the Association of Power Generation Companies (APGC), Dr. Joy Ogaji, disclosed this on Monday during the opening session of the three-day Powering Nigeria’s Power Sector Leaders Training Series 2026 – Professional Track.
According to Ogaji, the debt burden has continued to rise despite government efforts to address outstanding obligations in the Nigerian Electricity Supply Industry (NESI).
The Federal Government had earlier approved a N3.3 trillion settlement plan to clear legacy debts accumulated between 2015 and early 2025. The arrangement proposed settling the liabilities through a combination of 10-year promissory notes and proceeds from a N501.02 billion bond issued by the Nigerian Bulk Electricity Trading (NBET) Plc.
The bond issuance was designed as the first phase of a broader intervention aimed at reducing market shortfalls and restoring investor confidence in the power sector.
However, implementation of the plan has stalled amid disagreements over the actual size of the debt owed to generation companies.
Ogaji said the government’s verified debt figure of N3.3 trillion later rose to N3.8 trillion before the appointment of the Special Adviser on Power, Rilwan Lanre Babalola, and has since expanded to nearly N7 trillion as unpaid invoices continue to accumulate.
She maintained that GenCos have not received any fresh payments despite repeated assurances from the government.
“To date, we have not received any payment. We have not accepted the N3.3 trillion settlement proposal,” she said.
Ogaji also revealed that the Federal Government has yet to fully disburse the N500 billion raised through the bond market in December to settle part of the outstanding obligations.
She further disclosed that generation companies rejected suggestions that they should forfeit half of the debt owed to them, adding that gas suppliers also opposed the proposal.
According to her, efforts to convince gas suppliers to accept a 50 per cent reduction in the debts were unsuccessful.
“When we told the gas suppliers that the Federal Government had agreed to take 50 per cent off the debts, the gas suppliers refused and told us that we are on our own,” she stated.
Ogaji warned that the growing debt profile poses a serious threat to electricity generation and the overall stability of the power sector, as operators struggle to meet financial obligations and sustain operations.
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She called on the Minister of Power, Joseph Tegbe, to demonstrate strong political will by declaring a state of emergency in the sector and implementing urgent reforms to halt the accumulation of new debts.
According to her, addressing the existing liabilities must go hand in hand with creating a sustainable payment mechanism to prevent future debt build-up.
“His priority should be to stop the continuous growth of the debt profile while addressing the existing obligations,” she said.
Industry stakeholders have repeatedly warned that unless the debt crisis is resolved, investments in electricity generation could decline further, worsening Nigeria’s persistent power supply challenges.Police arrest eight foreign nationals over fake kidnap in Ogun
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