By [Your Name], Abuja
Nigeria’s fragile electricity sector is facing fresh turbulence as gas companies begin cutting supplies to power plants over an unpaid debt of ₦5.6 trillion owed to power generation companies (GenCos).
The development, confirmed by the Association of Power Generation Companies (APGC), has sparked fears of widespread blackouts and a deeper collapse of the national grid, which only days ago suffered another system failure.
Mounting Debt and Lingering Crisis
Speaking to The PUNCH on Thursday, APGC’s Managing Director/Chief Executive Officer, Dr Joy Ogaji, disclosed that an additional ₦1.6tn debt had accrued between January and August 2025, worsening the liquidity crisis in the sector.
She recalled that President Bola Tinubu met with the GenCos in July to address an estimated ₦4tn legacy debt, promising to verify claims and initiate a ₦4tn bond programme to bridge the gap. Nearly two months later, Ogaji lamented, no follow-up action had been taken.
“Almost 60 per cent of our revenues go to gas producers. Once debts pile up, gas supply is automatically constrained. We are at a point where the market could grind to a halt,” she warned.
Gas Cuts Deepen Power Strain
Nigeria’s power plants, heavily reliant on natural gas, are struggling to operate at capacity. With suppliers reducing deliveries, electricity output has plunged, forcing the Transmission Company of Nigeria to confirm only partial recovery to about 4,000 megawatts this week.
Ogaji stressed that operators remain committed to keeping the lights on but face challenges beyond their control, including the cost of machine maintenance, procurement of spares, and mounting obligations to creditors.
“Gas suppliers are already reducing supply. Creditors are no longer willing to wait. Patriotism alone cannot run power plants,” she said.
Flaws in Market Structure
The APGC chief criticised Nigeria’s electricity market design, arguing that without urgent reforms, no significant private sector investment would flow into the industry.
She noted that GenCos issue invoices of about ₦270bn monthly, yet receive only ₦70bn, leaving ₦200bn unpaid every month. She also dismissed the ₦900bn budgetary provision for the power sector as inadequate and lacking cash backing.
Doubts Over Government Instruments
Ogaji expressed scepticism about the government’s proposed use of promissory notes and bonds to settle debts, citing risks of interest rate exposure, foreign exchange volatility, and refinancing at maturity.
“Any breach of contractual terms has ripple effects on our relationships with banks and other creditors. We must understand the terms and risks before committing,” she said, warning that GenCos would not make concessions that undermine existing obligations.
Official Silence
Efforts to obtain a response from the Minister of Power, Adebayo Adelabu, were unsuccessful, as his spokesman, Bolaji Tunji, did not respond to calls or messages.
Looming Energy Crisis
Industry observers warn that unless the Federal Government, the Nigerian Electricity Regulatory Commission (NERC), the Nigerian Bulk Electricity Trading Plc (NBET), and the Debt Management Office (DMO) urgently engage GenCos, Nigeria risks sliding into another prolonged blackout.
The crisis underscores the fragility of the country’s electricity sector, where chronic debts, weak infrastructure, and unstable policy direction continue to undermine supply.
“Without urgent action, homes and businesses across Nigeria face an uncertain power future,” Ogaji concluded.