Insufficient budget, increasing debts threat to power generation — GENCOs

Power Generation Companies (GenCos) have criticised the Federal Government’s reluctance to provide adequate funding for the electricity generation sub-sector of the Nigerian Electricity Supply Industry (NESI).

Investors in GenCos, under the umbrella of the Association of Power Generation Companies (APGC), said the Federal Government’s neglect of the ₦4 trillion owed to GenCos from 2015 to 2024—alongside a meagre ₦900 billion budget allocation to the power sector in 2025—does not indicate progress.

According to the APGC, GenCos have already accumulated ₦1.2 trillion in additional debt in the first half of 2025 alone.

The Executive Secretary of the APGC, Dr Joy Ogaji, said:
“In outstanding payments, recall that GenCos are currently owed about ₦4 trillion—₦2 trillion for 2024 and ₦1.9 trillion in legacy debts accumulated between 2015 and 2024—with an additional ₦1.2 trillion in debts incurred in just the first half of 2025. There are currently no workable solutions in sight, whether through cash payments, financial instruments, or debt swaps.”

On the issue of budgetary allocation, she noted:
“The 2025 government budget allocates only ₦900 billion, raising concerns about its adequacy to cover both arrears and future deficits. Power generated by GenCos continues to be fully consumed without corresponding full payment.”

ALSO READ: UNICEF, Sokoto govt partner to uplift adolescent girls across dix LGs

“At the inception of the Transitional Electricity Market (TEM) in 2015, commitments were made to ‘guarantee’ full payment of GenCos’ invoices, supported by security deposits which the Distribution Companies (DisCos) were expected to provide to cover monthly shortfalls. GenCos relied on this supposed guarantee and payment assurance to increase their investments in additional capacity.”

“Sadly, as of today, those payment assurances and supposed guarantees—whether from the Nigerian Bulk Electricity Trading Plc (NBET) or the DisCos—are no longer in place, with dire consequences for the GenCos, the entire power sector, and the Nigerian economy.”

“GenCos, as responsible corporate citizens with patriotic zeal, have made large-scale investments in the power sector, taking on associated business risks while fulfilling their obligations as stipulated in various industry agreements. Despite the challenges they face, they have continued to add capacity.”

NIGERIAN TRIBUNE