Abuja – The Federal Government is racing against time to settle a staggering N4.7tn debt owed to electricity generation companies (Gencos) amid warnings of an imminent nationwide power collapse, The Bureau Newspaper can authoritatively report.
Sector in Crisis
Power stakeholders reveal that:
- Gencos struggle to operate plants due to unpaid invoices
- Gas suppliers threaten supply cuts over mounting debts
- Monthly debt grows by N200bn as payments lag
- Only 28% of 2024 invoices (N762bn of N2.7tn) were settled
Minister of Power Adebayo Adelabu, through spokesperson Bolaji Tunji, assured that “no plant will shut down,” citing ongoing interventions. However, industry insiders paint a grimmer picture.
Debt Breakdown
- Legacy Debt: N2tn accumulated pre-2024
- 2024 Subsidy Shortfall: N1.9tn (Gencos) + N450bn (Discos)
- Current Monthly Deficit: N200bn added to pile
Generation Companies Bleeding
Transcorp Power CEO Owen Omogiafo disclosed:
“We’re owed N650bn for power already generated. Our 2,000MW capacity now delivers just 1,000MW due to liquidity constraints.”
APGC Executive Director Dr. Joy Ogaji confirmed: “The N4.7tn liquidity crisis threatens operational sustainability.”
Domino Effect
- Gas Supply Cuts: Suppliers issued December 2024 suspension notices
- DisCo Collateral Damage: Military/MDA debts (e.g., N4bn Air Force arrears) choke remittances
- Investor Flight: New capacity investments stall
Government’s Stopgap Measures
While the 2024 power budget stands at N900bn – a fraction of the debt – the Ministry claims:
- Prioritizing legacy debt clearance
- Negotiating with gas suppliers
- Exploring alternative financing
Sector Analysts Warn
- Repeat of Q1 2024 blackout likely without immediate payment
- Current collection efficiency (77.4%) insufficient for sector viability
- Subsidy model unsustainable amid rising consumption
Stakeholder Reactions
- Discos: Blame non-paying government agencies for value-chain disruption
- Gencos: “Book profits on paper while awaiting phantom payments”
- NERC: Monitoring but yet to enforce payment guarantees
What Next?
With the national grid’s stability hanging in the balance, observers await:
- FG’s concrete repayment roadmap
- Potential emergency funding from CBN
- Structural reforms to prevent recurrence
The power sector’s survival now hinges on urgent fiscal intervention to avert an economic shutdown.