Industry collapse looms as electricity generation companies issue warning; investors demand immediate bailout
By IDNN Energy Correspondent
President Bola Tinubu is set to hold an emergency meeting with Nigeria’s electricity generation companies (GenCos) as the country’s power sector teeters on the brink of collapse under the weight of ₦4 trillion in unpaid debts.
The debt, made up of ₦2 trillion for 2024 supply and another ₦1.9 trillion in legacy arrears, has pushed multiple Gencos to critical liquidity crisis, according to officials.
Minister of Power, Adebayo Adelabu, met with the companies last week in Abuja, promising urgent action and proposing that a substantial portion of the debt be cleared through cash and promissory notes.
“There is a need to pay a substantial amount in cash,” Adelabu said. “The government is committed to resolving this debt to stabilise the sector.”
Industry Leaders Sound the Alarm
At the meeting, chaired by Col. Sani Bello (rtd) of Mainstream Energy Solutions, power investors described the situation as an existential emergency.
“Without urgent intervention, the entire power ecosystem could collapse,” Bello warned.
Kola Adesina, chairman of Egbin Power and First Independent Power, said the crisis affects national security:
“Everything hinges on power. We can’t let the sector fail.”
The Association of Power Generating Companies (APGC) also blamed the Nigerian Bulk Electricity Trading Company (NBET) and systemic failures for the current crisis — including erratic gas supply, aged infrastructure, and tariff inconsistencies.
Naira Crash Worsens Debt Burden
According to Dr. Joy Ogaji, CEO of APGC, currency volatility has worsened GenCos’ operating costs, with the naira crashing from ₦157/$ in 2013 to over ₦1,600/$ in 2025 — making spare parts, loans, and maintenance nearly unaffordable.
“We’ve borne unsustainable risks — from grid failures to unproductive taxes — while remaining patriotic,” she said.
Promises, Politics, and Pushback
Multiple sources confirmed that power firms have written to Tinubu demanding direct intervention. The letter, dated April 29, was signed by investors including Tony Elumelu, Femi Otedola, and Kola Adesina.
They expressed dissatisfaction with the federal budget’s “paltry provision” for electricity debt, raising fears that the administration lacks a coherent financing plan.
“We need clarity, not vague promises,” one executive said anonymously.
Among their concerns:
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Uncertainty over promissory note terms
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Doubts about auction fairness and enforceability
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Delays in previously promised subsidy payments
In a sharp critique, power firms said the government’s push for Band A tariff hikes — where customers pay full cost for premium supply — was not matched with proper liquidity injection into the supply chain.
What’s Next?
The presidency has not yet confirmed a date for the Tinubu–GenCos meeting. However, pressure is mounting as electricity supply dips and fuel costs surge.
The government recently received $500 million from the World Bank for metering and grid improvements, and earmarked ₦700 billion for the Presidential Metering Initiative (PMI). But GenCos say little of this cash has flowed to tackle core liquidity issues.
Adelabu said full market liberalisation remains on the table, with a shift to cost-reflective tariffs and targeted subsidies for the vulnerable. But critics argue such reforms require urgency, not bureaucracy.