{"id":2848,"date":"2026-02-23T21:06:07","date_gmt":"2026-02-23T21:06:07","guid":{"rendered":"https:\/\/stakebridgeirpr.com\/media\/?p=2848"},"modified":"2026-02-23T21:06:07","modified_gmt":"2026-02-23T21:06:07","slug":"gencos-sound-alarm-as-power-sector-debt-hits-n6-5trn","status":"publish","type":"post","link":"https:\/\/stakebridgeirpr.com\/media\/gencos-sound-alarm-as-power-sector-debt-hits-n6-5trn\/","title":{"rendered":"GenCos Sound Alarm As Power Sector Debt Hits N6.5trn"},"content":{"rendered":"

By Enam Obiosio<\/strong><\/p>\n

 <\/p>\n

Electricity generation companies (GenCos) say the federal government\u2019s payment backlog has climbed to about N6.5 trillion, intensifying pressure across Nigeria\u2019s already fragile power value chain.<\/p>\n

Joy Ogaji, CEO of the Association of Power Generation Companies, disclosed the figure during a televised interview, linking the arrears to persistent underpayments by the Nigerian Bulk Electricity Trader.<\/p>\n

DECISION HIGHLIGHT<\/strong>
\nIndustry operators are warning that the current settlement approach is materially insufficient.<\/p>\n

Ogaji stated that monthly GenCo invoices average N280 billion, but \u201cthe payment is just about 35 percent and sometimes below that,\u201d leaving \u201ca monthly shortfall of N200 billion every month.\u201d<\/p>\n

She stated that although government recently issued a N501 billion bond,<\/a> the liability is \u201cstill swelling like garri soaked in water.\u201d<\/p>\n

DECISION MEMO <\/strong>
\nThe GenCos\u2019 latest warning exposes the widening financial fault line at the core of Nigeria\u2019s electricity market, where chronic payment shortfalls are now approaching systemic risk levels.<\/p>\n

At N6.5 trillion, the accumulated debt is no longer a routine liquidity issue but a structural solvency concern for the generation segment. Ogaji\u2019s disclosure that the liability has risen from N4 trillion in December 2024 to the current level underscores the speed at which the deficit is compounding.<\/p>\n

The monthly cash flow picture is equally concerning. With only about 35 percent of the N280 billion monthly invoice being settled, the sector is effectively operating under a persistent revenue compression regime. The implied N200 billion monthly gap suggests that without a structural fix, the debt stock will continue to expand even if periodic bonds are issued.<\/p>\n

Government has attempted partial relief through the Presidential Power Sector Debt Reduction Programme<\/a>, including the N501 billion bond issuance and plans to raise N1.23 trillion in the first quarter of 2026. However, Ogaji\u2019s critique highlights the scale mismatch between intervention and obligation. Her assertion that the N500 billion support is insignificant relative to the over N6 trillion owed reflects deepening industry frustration.<\/p>\n

More politically sensitive is her claim that President Tinubu had earlier indicated a willingness to approve N4 trillion to clear legacy debts, but that \u201chis handlers and his advisors\u201d have \u201chijacking this N4 trillion and have decided to balkanise it.\u201d While unverified from the government side, the comment signals rising trust deficits between operators and policymakers.<\/p>\n

The broader structural issue remains unchanged. NBET continues to sit between cost reflective generation tariffs and the weaker payment capacity of distribution companies and end users. Until tariff alignment, subsidy clarity and market discipline converge, the sector risks remaining trapped in a recurring debt accumulation loop.<\/p>\n

In practical terms, GenCos are warning that the current trajectory threatens generation reliability, gas supply confidence and future private investment into Nigeria\u2019s power infrastructure.<\/p>\n

DATA BOX<\/strong><\/p>\n