Power generation companies (GenCos) have cried out over the worsening state of the electricity sector, cautioning that without urgent reforms, the industry risks deeper deterioration with dire implications for economic growth, investor confidence, and national development.
In a goodwill message marking Nigeria’s 65th Independence anniversary, the Association of Power Generation Companies (APGC) described the generation segment of the electricity value chain as being at a “critical crossroads” due to rising debts, liquidity constraints, and operational bottlenecks.
Chief Executive Officer of the APGC, Joy Ogaji, who signed the statement, said debts owed to GenCos have now surpassed N5 trillion, largely on account of unsettled subsidy payments that cost the Federal Government more than N200 billion monthly. She warned that “patriotism alone cannot sustain the operators,” particularly as gas suppliers increasingly divert output away from power plants.
“Without urgent, coordinated, and sustained action, the sector risks further deterioration, a situation that would have far-reaching implications for national development, economic stability, and investor confidence,” Ogaji cautioned.
While acknowledging recent interventions to address market liquidity and stimulate private investment, the GenCos stressed that such gains could be quickly reversed. “At 65, the reality is that the generation segment of the power value chain stands at critical crossroads. GenCos are under enormous financial and operational pressure,” the association said.
The APGC also denied viral claims on social media that the Federal government had approved a N4 trillion debt refinancing plan to clear arrears owed to 27 power generation companies between 2015 and 2023. It maintained that no such approval had been communicated, a development analysts say highlights the persistent lack of clarity in the sector.
Nigeria, despite having an installed capacity of over 13,000 megawatts, continues to generate between 3,500MW and 5,000MW, constrained by poor transmission infrastructure, gas shortages, and liquidity shortfalls. Since the 2013 privatisation exercise, the sector has remained hampered by financial illiquidity, cost-reflective tariff gaps, and regulatory uncertainty.
The APGC reiterated that outstanding debts, estimated at ₦5.6 trillion as of last month, pose a grave threat to the survival of operators. It argued that failure to settle obligations, incentivise gas supply, and expand transmi8ssion investment could trigger sector-wide collapse.
“The progress made so far risks reversal if liquidity challenges are not resolved, if investments are not incentivised, and if tariffs do not reflect the true cost of power,” Ogaji stated, adding that electricity supply remains vital to industrial growth, job creation, and poverty reduction.
The association commended Nigerians’ resilience, noting that the Independence anniversary should serve as a reminder of the need to transform the power sector into an engine of sustainable development.
“Unless bold steps are taken to resolve liquidity challenges, incentivise investment, and guarantee cost-reflective tariffs, the dream of a stable power supply will remain elusive, even as the country moves closer to its seventh decade of nationhood,” the statement concluded.
- Media Report