Nigeria’s power generation companies have raised fresh concerns over the worsening state of the electricity sector, warning that unless the Federal Government urgently implements coordinated reforms, the industry risks deeper deterioration with dire consequences for economic growth, investor confidence, and national development.
In a goodwill message to Nigerians marking the country’s 65th Independence anniversary, the Association of Power Generation Companies said the generation segment of the electricity value chain now stands at a “critical crossroads” due to mounting debts, operational challenges, and inadequate support.
The APGC Chief Executive Officer, Joy Ogaji, who signed the statement, lamented that generation companies are under enormous financial and operational pressure. She noted that debts owed to the GenCos have risen above N5tn, largely due to the Federal Government’s inability to settle subsidy payments, which gulped over N200bn monthly.
According to her, patriotism alone cannot sustain the operators, especially as gas producers—the lifeblood of thermal power plants—are increasingly diverting supply to other markets. “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 warned.
While commending the Federal Government for interventions aimed at tackling market liquidity challenges, stimulating private sector investment, and expanding access to electricity, Ogaji cautioned that these gains could be reversed without decisive steps. “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,” she stressed.
The association used the Independence Day celebration to felicitate with President Bola Tinubu, the government, and Nigerians, describing October 1 as a symbolic day to reflect on the nation’s resilience and renew hope for a stronger future. “It is a time to acknowledge the resilience and determination that have kept us united despite daunting socio-economic and political challenges. As we commemorate this milestone, we honour the sacrifices of our heroes past who fought for our liberty and recommit ourselves to building a nation that truly delivers on the promise of independence,” the statement read.
Meanwhile, the GenCos have denied reports circulating on social media that the Federal Government had approved a N4tn debt refinancing plan to clear legacy debts owed to 27 power generation companies for energy supplied between 2015 and 2023.
The viral post claimed that the government had concluded arrangements for the refinancing, but the association insisted it had no knowledge of such an approval. Industry stakeholders say the denial underscores the lack of clarity that has long plagued the sector, further complicating efforts to restore investor confidence.
Nigeria, Africa’s largest economy, has battled electricity shortages for decades despite having an installed generation capacity of over 13,000 megawatts. Actual supply to the national grid typically fluctuates between 3,500MW and 5,000MW due to transmission constraints, insufficient gas supply, and liquidity challenges across the value chain.
The 2013 privatisation of power generation and distribution companies was designed to address inefficiencies and improve supply. More than a decade later, however, the industry is still mired in financial illiquidity, technical bottlenecks, and regulatory uncertainty.
Just last month, the APGC disclosed that outstanding debts in the sector had reached N5.6tn. GenCos have repeatedly warned that the situation could trigger a collapse if urgent steps are not taken. The lack of cost-reflective tariffs, foreign exchange shortages, and growing debts owed by the Nigerian Bulk Electricity Trading Company have further worsened the plight of operators.
“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,” the association maintained.
Electricity remains central to industrial development, job creation, and improved quality of life. Analysts note that Nigeria’s persistent power crisis continues to undermine its economic competitiveness, with businesses and households relying heavily on costly self-generation through diesel and petrol generators. This dependence adds to production costs, fuels inflation, and erodes consumer purchasing power.
Ogaji noted that while government interventions—such as efforts to address market liquidity and encourage private investment—are commendable, the scale of the crisis requires bolder, more coordinated reforms. She emphasised that failure to act decisively would not only stall economic growth but also deter foreign investors seeking predictable and stable returns.
The APGC reaffirmed its commitment to national growth and urged the Federal Government to prioritise reforms that would restore investor confidence and ensure a reliable electricity supply. Key among the reforms, experts say, is the need to guarantee cost-reflective tariffs, clear outstanding debts, incentivise gas supply, and expand investment in transmission infrastructure to reduce bottlenecks.
“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 association concluded.
As Nigeria marks 65 years of independence, the GenCos’ warning highlights the urgency of transforming the power sector from a perennial burden into a true enabler of sustainable national development.
