Nigeria's electricity generation companies have raised fresh concerns over the stability of the nation's power supply, warning that worsening gas shortages triggered by mounting unpaid debts are pushing several generating plants to the brink of closure.
The power producers said the persistent liquidity crisis in the Nigerian Electricity Supply Industry (NESI) has left many generation companies unable to pay gas suppliers, resulting in supply cut-offs that have forced some plants to reduce output while others have suspended operations entirely.
Speaking on the development, Chief Executive Officer of the Association of Power Generation Companies (APGC), Joy Ogaji, said the Federal Government's proposed second tranche of the Presidential Power Sector Debt Reduction Programme, valued at ₦729 billion, would offer only temporary relief unless the underlying structural problems in the sector are addressed.
According to her, outstanding obligations owed to generation companies have now exceeded ₦3 trillion, with fresh debts continuing to accumulate monthly because operators are not being fully paid for electricity supplied to the national grid.
She warned that the inability of GenCos to settle gas invoices has prompted several suppliers to disconnect power plants, further threatening electricity generation nationwide.
Ogaji cited Ibom Power as one of the casualties of the crisis, noting that the plant has remained idle since 2025 after its gas supply was cut over unpaid bills.
"Ibom Power has not generated since 2025 because of the debt. Gas suppliers disconnected them, and the same situation applies to several other GenCos. Some generating companies have not even been able to pay workers' salaries for months," she said.
She cautioned that unless the liquidity challenge is resolved, more generating companies could shut down, worsening the country's electricity shortages.
"The reality is that if nothing changes, GenCos may eventually have to stop generating because the financial burden has become unsustainable," she warned.
While welcoming the Federal Government's plan to settle outstanding obligations through bond issuances, Ogaji argued that the initiative would not provide a lasting solution unless accompanied by reforms capable of preventing new debts from accumulating.
She explained that the proposed bond programme is designed to settle only verified legacy debts up to December 2024, whereas new liabilities have continued to build because electricity distribution companies (DisCos) and the Nigerian Bulk Electricity Trading Plc (NBET) still do not remit the full value of invoices owed to generating companies.
Questioning claims that the intervention would permanently resolve the sector's financial crisis, Ogaji said the industry's debt burden would continue to rise unless the market becomes financially sustainable.
"How will a seven-year ₦4 trillion bond clear the debts when new obligations are still being created every month? We must be careful not to politicise the challenges facing GenCos," she said.
She further explained that although the government plans to spread repayment of the ₦4 trillion debt over seven years, the market continues to experience significant monthly revenue shortfalls.
According to her, by the time the legacy debts are fully repaid, even larger liabilities would have accumulated unless distribution companies improve their remittances and the sector's revenue framework is overhauled.
"What we need is a sustainable solution. As long as DisCos and NBET continue to underpay, the debt profile will keep rising despite any bond programme," she added.
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