NEWS
Power Crisis Deepens as GenCos Reject ₦3.3tn Debt Figure, Insist Federal Government Has Paid Nothing
Fresh concerns have emerged over the financial stability of Nigeria’s electricity sector as power generation companies (GenCos) have accused the Federal Government of failing to commence payment of the massive debt owed to operators despite earlier assurances that a settlement process had begun.
The power producers, operating under the umbrella of the Association of Power Generation Companies (APGC), disclosed that no payment has been received by most generation companies under the debt settlement framework approved by President Bola Ahmed Tinubu in April 2026.
The development has further intensified worries about the sustainability of electricity generation in the country, with industry stakeholders warning that unresolved debts continue to threaten power supply, gas procurement, and overall sector operations.
Speaking during a webinar organized by the APGC on Monday, the association’s Chief Executive Officer, Joy Ogaji, challenged the Federal Government’s claims that efforts were underway to clear the debt burden, insisting that operators have yet to receive any financial relief.
“You know that this acceptance of the government is like a moving target. Earlier, the government said the debt was ₦2.3tn. About a month or two after, it increased to ₦2.8tn.
“The last one was ₦3.3tn before they appointed a new special adviser on power. Now, let me tell you that from that ₦3.3tn or ₦2.8tn, to date, we have not received a dime. Nothing has been received by the GenCos,” she stated.
The controversy follows an announcement made on April 5 by presidential spokesman Bayo Onanuga, who disclosed that President Tinubu had approved a comprehensive debt settlement plan under the Presidential Power Sector Financial Reforms Programme.
According to the presidency, a verification exercise conducted across the sector resulted in an agreement that fixed the outstanding legacy debt at ₦3.3 trillion. The amount was presented as a full and final settlement of obligations accumulated between February 2015 and March 2025.
The Federal Government also stated that implementation had already commenced, revealing that 15 power plants had signed settlement agreements valued at ₦2.3 trillion, while ₦501 billion had been raised to facilitate payments.
Despite these assurances, APGC maintains that no meaningful payment has reached most generation companies.
Ogaji further disclosed that even the ₦501 billion bond raised by the Federal Government remains under disbursement and has not been fully distributed to beneficiaries.
“The ₦500bn bond that they said they raised by December and January this year, as I speak to you, they’ve not even finished disbursing.
“I believe that they are planning the disbursement until the end of the election,” she stated.
Beyond the issue of payment delays, the GenCos have also rejected the Federal Government’s assessment of the debt profile, insisting that the amount owed is significantly higher than the ₦3.3 trillion acknowledged by authorities.
Addressing whether generation companies had accepted the government’s debt computation, Ogaji made it clear that operators do not agree with the figure.
“We have not accepted ₦3.3tn; the GenCos have not accepted it because when we reconciled our debt to the gas suppliers, we owed them over ₦4tn,” she said.
The disagreement is further complicated by obligations owed to gas suppliers, who provide the fuel required for thermal power generation.
According to APGC, gas companies have refused to accept any proposal that would reduce the amounts owed to them.
“And we also engaged the gas suppliers to tell them that the government was proposing to remove 50 per cent of what we are requesting, 70 per cent of which money belongs to the gas suppliers.
“We ask them if we should accept. They responded and said we’re on our own. The gasCos said they didn’t have any contract with the government, but we continue to owe them to the last dime, and they are not going to concede to even one naira,” she said.
The APGC CEO also revealed that only five generation companies agreed to participate in the Federal Government’s bond arrangement, which involved accepting a significant reduction in the debt owed to them.
“When the FG floated the N500bn bond, they said they would give GenCos 50 per cent, that is, a 50 per cent cut of their current debts. The GenCos rejected it, except for five: Geregu, Ibom Power, FIPL, NDPHC, and Mabon Energy. These are the five receiving payments; they signed that bond,” she added.
According to her, the vast majority of generation companies have not received any payments under the arrangement and remain burdened by growing financial obligations.
“Nothing has been done about the ₦3.3tn or the ₦6.8tn, which has now ballooned to over ₦7tn, and still growing,” Ogaji said.
The Federal Government had earlier announced measures aimed at reducing the sector’s debt burden through the Presidential Power Sector Debt Reduction Programme.
In January, the Special Adviser to the President on Energy, Olu Verheijen, disclosed that five generation companies operating 14 power plants had entered into settlement agreements with the Nigerian Bulk Electricity Trading Plc following the issuance of the ₦501 billion bond.
The companies — First Independent Power Limited, Geregu Power Plc, Ibom Power Company Limited, Mabon Limited, and the Niger Delta Power Holding Company Limited, reportedly agreed to a negotiated settlement worth ₦827.16 billion, with payments scheduled to be made in four instalments.
However, with GenCos now insisting that no substantial payments have reached most operators and rejecting the government’s debt valuation, fresh uncertainty hangs over Nigeria’s electricity sector. Industry observers warn that unless the debt crisis is urgently resolved, the financial strain on power generation companies could further impact electricity production, deepen liquidity challenges, and slow ongoing efforts to stabilize the nation’s power supply chain.