…Cite current N5.2 trillion outstanding debts FG owes GenCos
Investors in power Generation Companies (GenCos) nationwide under the aegis of Association of Power Generation Companies (APGC), have accused the federal government of not doing enough to fund electricity generation subsector of the Nigeria Electricity Supply Industry (NESI).
The Association bemoans Federal governments mere budget of N900 billion for the power sector in 2025 while neglecting accumulated debts of over N4 trillion owed to the GenCos between 2015 – 2024 with no plan in sight on how to off set the debts incurred on power generated but not fully paid for by the Federal government.
In addition to the accumulation of debts, the GenCos further cited that they have already incurred another N1.2 trillion within the first half of 2025.
The Executive Secretary of APGC, Dr. Joy Ogaji, who gave the statistics said: In outstanding payments, recall that GenCos are currently owed about ₦4 trillion (₦2 trillion for 2024 and ₦1.9 trillion in legacy debts) (2015-2024) with an accumulated debt of N1.2trn for first half of 2025 alone. There are NO workable solutions, including cash payments, financial instruments, and debt swaps in sight at the moment.
“On budget allocation concerns, the 2025 government budget allocates only ₦900 billion, raising concerns about its adequacy to cover arrears and future deficits.The power generated by GenCos have continued to be consumed in full without corresponding full payment.”
She maintained that the Federal government has no policy on to the power sector subsidies but is rather unsuccessfully trying to off set accumulated debts it owed.
She lamented that the GenCos monthly generation invoices averages at about N250 billion while the federal government budget of N900 billion for 2025 is not even cash backed till date.
According to Dr. Ogaji, “At the inception of the Transitional Electricity Market (TEM) in 2015, commitments were made to “guarantee” GenCos full payment of their invoices, underpinned by security deposits which the Distribution Companies (“DisCos”) were meant to provide, to cover monthly shortfall in payments.
“GenCos relied on this supposed guarantee and payment assurance to increase their investment in additional capacity.
“Sadly, as at today, the payment assurances and supposed guarantees (whether from Nigerian Bulk Electricity Plc [NBET] or the Electricity Distribution Companies [DisCos] are not in place with resultant dire consequences for GenCos, the entire power sector and the Nigerian economy.
“GenCos, as good corporate citizens with patriotic zeal, have made large-scale investments in the power sector with associated business risks while fulfilling their obligations as stipulated in the terms and conditions and guidelines contained in the various industry agreements and have continued to add capacity, despite the difficulties being faced by them on their part.
“For the clarity of purpose and the avoidance of any doubt, the critically disruptive obligations of the industry to GenCos include: Outstanding indebtedness on already invoiced Energy and Capacity delivered/availed, Non-payment of interest on unpaid invoiced amounts (time value of money), Resolution of the issues associated with Available Capacity and payment of its relevant Deemed Capacity, Procurement of Spinning Reserves and Payment for Ancillary Services, Full activation of the Operating Power Purchase Agreements (“PPAs”); and going forward, a sustainable full invoice payment arrangement that will enable the GenCos to continue to meet their various obligations and operate as going concerns.”
