By Ediri Ejoh
Electricity Generation Companies in Nigeria (GenCos) have indicated that Indebtedness in the sector is on steady rise hitting N6.5 trillion as at end last month while also forecasting that it will reach N8.8 trillion by end of this year.
In a memo to the ministry of power, the GenCos called on the federal government to take structural action as a matter of urgency to address the problem.
The GenCos added that the debt in 2025 alone, stood at N2.4 trillion going by the N200 billion monthly shortfall.
It noted that “out of N280 billion monthly invoices issued to the sector, only 35% were paid. However, the debt has accrued to N6.5 trillion now and will reach N8.8 trillion by December.”
On the sector’s challenges, it stated that “Installed capacity increased to 15,500 megawatts but only 5,000megawatts were transmitted to consumers.
The memo called for a presidential-led reform, a long-term debt solution, a strengthened value chain, and investor confidence to be restored to the sector.
It stated: “GENCOs operate 24 hours a day, 365 days a year. Regardless of market constraints, liquidity challenges, fuel limitations, or infrastructure bottlenecks, their work continues uninterrupted.
“While power interruptions are often visible to the public, the effort required to sustain generation under difficult conditions remains largely unseen.
“GENCOs and their Generation Control Centres are the silent force behind electricity supply; unheralded, yet indispensable.
“Without their continuous operational discipline and technical expertise, the entire power value chain would grind to a halt.”
Reacting, Energy Economist and Executive Director, Emmanuel Egbigah Foundation, Prof. Wumi Iledare, said, “The increasing involvement of state governments in electricity generation and distribution calls for governance discipline anchored on the quadruple ‘E’ principles — Efficiency, Effectiveness, Ethics, and Equity. Without these, decentralization may simply replicate federal inefficiencies under new actors.
“The Nigerian Bulk Electricity Trading Plc (NBET) remains central to market stability as a creditworthy intermediary, sustaining investor confidence and payment assurance in a fragile power market.
Yet, its continued relevance depends on governance integrity, ethical leadership, and transparent oversight.
“There is also an emerging realization that the sustainability of GENCOs cannot be achieved in isolation from midstream and downstream optimization.
Power generation without a reliable gas supply, efficient transmission, and effective distribution is economically unsustainable.
“Hence, vertical integration — even if partial or strategic — is worthy of serious consideration. In complex value chains like oil, gas, and power, integration enhances operational synergy, cost efficiency, and investment security. It minimizes market fragmentation and strengthens institutional coordination, ensuring that reforms deliver tangible economic value.
“While NBET continues to play a stabilizing role, the long-term sustainability of Nigeria’s electricity industry depends on integrated governance, where each segment — from gas-to-power to end-use delivery — aligns under coherent economic and ethical principles consistent with the quadruple ‘E’.
“The question, therefore, is not whether states should participate, but how they do so — with competence, transparency, and a value-creation mindset that transforms electricity supply from a political trophy into an economic enabler.”
Recall that the federal government had issued a ¦ 501 billion inaugural power sector bond a couple of weeks ago. The bond was issued under the Presidential Power Sector Debt Reduction Program. Notably, the offer achieved one hundred percent subscription. Pension funds, banks, asset managers, and other institutional investors participated actively.
The program, targets long-standing payment arrears owed to power generation companies. For more than a decade, these debts constrained liquidity across the electricity value chain. As a result, balance sheets weakened and investment appetite declined. Therefore, the new bond represents a decisive intervention.
The issuance followed the successful completion of Series One by NBET Finance Company Plc. The Series One bond closed at ¦ 501 billion. Of this amount, ¦ 300 billion came from capital market investors. Meanwhile, ¦ 201 billion was allotted directly to participating generation companies. This structure reflects strong confidence in the reform agenda.
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