President Bola Ahmed Tinubu is preparing to meet with electricity generation companies (GenCos) in a bid to address the mounting financial crisis threatening Nigeria’s power sector, as debts owed to the firms have surged to a staggering N4 trillion.
The planned meeting comes amid growing concerns from industry stakeholders over the sector’s viability, with the bulk of the debt stemming from over N2 trillion in legacy obligations and an additional N1.9 trillion in unpaid subsidies for the year 2024. Distribution companies (DisCos) are also reportedly owed about N450 billion, worsening the liquidity squeeze across the electricity value chain.
According to Power Minister Adebayo Adelabu, the debts have severely hampered the operations of GenCos, undermining their capacity to generate stable power, service financial obligations, and make critical infrastructure investments. The consequences have been evident in Nigeria’s recurrent electricity outages and the increasing unreliability of the national grid.
The Association of Power Generation Companies (APGC) has warned that the sector is on the verge of collapse if urgent action is not taken. The group criticized the current payment structure—referred to as the “waterfall arrangement”—which sees GenCos receiving only a fraction of what they invoice, thereby deepening the cash flow crisis.
In response, President Tinubu is expected to meet with key GenCo executives to discuss possible solutions, including debt restructuring, tariff reforms, and targeted government subsidies to stabilize the industry. The meeting is seen as a critical step toward averting a total breakdown of Nigeria’s electricity system.
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The outcome of the talks could significantly influence the future of Nigeria’s energy sector, with implications for industrial productivity, economic growth, and the daily lives of millions of citizens who rely on a stable power supply.
