Osamagbe Imadiyi
Power generation companies are threatening a showdown, and darkness is looming in Nigeria. The federal government’s and other market operators’ outstanding debts have risen to more than N4 trillion.
On Monday, Rtd. Colonel Sani Bello, the chairman of the GenCos’ Board of Trustees, informed reporters in Abuja of the threats. GenCos bemoaned how their operations were being crippled by the growing liabilities, which threatened to completely shut down Nigeria’s electricity generation.
“GenCos have used all of the electricity they produced without getting paid. For the GenCos and, consequently, the whole power value chain, this situation has disastrous repercussions,” he stated.
The remaining N1.9 trillion is for legacy debts, and the remaining N2 trillion is for electricity produced in 2024. The N900 billion allotted for the power sector in the 2025 national budget, according to GenCos, is woefully insufficient to settle those arrears and support further payments.
The dramatic drop in collection rates, which fell below 30 percent in 2024, is another point of emphasis for the GenCos, who claim that this has made the liquidity crisis worse. Limited access to foreign exchange and operating expenses in US dollars exacerbate the problem even more. Bello emphasized the significance of a stable dollar allocation option or specialized window for the GenCos.
GenCos further stated that they were calling for immediate government action, including guarantees from organizations such as the World Bank and AfDB, reprioritization of the waterfall payment structure, and the full settlement of outstanding invoices.
“To address the liquidity issue in a realistic and sustainable manner, all stakeholders must take a coordinated approach. “This request needs to be addressed immediately,” he continued.
