Nigeria’s electricity sector is on the brink of collapse as the federal government struggles to address a staggering ₦4 trillion ($2.7 billion USD) debt owed to power generation companies (GENCOs), threatening nationwide blackouts and grid failure.
According to a Sunday statement from the Federal Ministry of Power, the crisis stems from both recent and historical arrears: ₦2 trillion for power generated in 2024 alone, and ₦1.9 trillion in outstanding payments from prior years. The debt has left GENCOs unable to meet operational costs, including gas supply, maintenance, and staff salaries, putting immense pressure on the national grid.
In an effort to avert total collapse, President Bola Ahmed Tinubu is expected to meet GENCO executives after emergency talks were held on Tuesday in Abuja between Power Minister Adebayo Adelabu and power sector stakeholders. While a specific date for the presidential meeting has yet to be announced, insiders say discussions are already underway on a repayment plan that would include cash settlements and promissory notes to be issued over a six-month period.
Bolaji Tunji, Special Adviser to the Power Minister, confirmed that the plan will be formally presented to the president, alongside recommendations for stabilizing the sector. The government is also consulting with the Central Bank of Nigeria (CBN) and the Ministry of Finance to secure the necessary funding mechanisms. Nigeria’s national grid has suffered multiple collapses in 2024, and industry experts warn that further delays in settling debts could lead to widespread outages, severely affecting homes, businesses, hospitals, and manufacturing operations. The country, which has an installed capacity of about 13,000 MW, often produces less than 4,500 MW due to infrastructure and liquidity constraints.
