Nigeria owes power generation firms N6.5tn, APGC CEO says as monthly shortfall tops N200bn

Nigeria’s power generation companies are owed approximately N6.5 trillion by the federal government, according to Joy Ogaji, Chief Executive Officer of the Association of Power Generation Companies (APGC).

Speaking on Arise TV’s Morning Show on Thursday, Ogaji said the debt, accumulated largely through the Nigerian Bulk Electricity Trader (NBET), which purchases electricity from GenCos and supplies it to distribution companies, has continued to swell amid persistent payment shortfalls.

She disclosed that monthly invoices for electricity generated currently average about N280 billion, of which roughly N200 billion remains unpaid.

“The payment is just about 35 percent and sometimes below that… we have a monthly shortfall of N200 billion every month,” she said.

Debt Escalation

Ogaji said verified arrears stood at N4 trillion as of December 2024 but have since risen to N6.5 trillion, reflecting mounting liquidity pressures across the power value chain.

From 2014 to this month, it has increased to N6.5 trillion,” she stated.

The liquidity crisis has intensified despite government efforts to restructure sector liabilities.

On December 19, authorities announced plans to raise N1.23 trillion by the first quarter of 2026 to settle verified arrears owed to generation companies and gas suppliers.

Subsequently, on January 27, the government issued a N501 billion inaugural bond under the Presidential Power Sector Debt Reduction Programme (PPSDRP), aimed at easing legacy obligations.

Ogaji, however, described the intervention as insufficient relative to the scale of outstanding liabilities.

“The debt is still swelling like garri soaked in water,” she said, adding that 2025 alone contributed more than N1 trillion to the outstanding balance.

Financing Gap Concerns

According to the APGC, the N500 billion bond issuance represents only a fraction of the over N6 trillion owed, raising concerns about the sustainability of power generation operations and investor confidence in the sector.

Ogaji referenced a July 25 meeting with President Bola Tinubu, during which she said the president assured GenCos of plans to approve N4 trillion to clear legacy debt as of 2024 and prevent further accumulation.

She alleged that subsequent decisions by government advisers diluted the scope of the promised intervention, resulting in fragmented implementation.

Sector Implications

The growing arrears highlight structural weaknesses in Nigeria’s electricity market, where tariff gaps, collection inefficiencies and subsidy burdens continue to constrain liquidity.

Analysts warn that sustained payment shortfalls could undermine generation capacity, delay maintenance investments and exacerbate grid instability if unresolved.

With monthly deficits averaging N200 billion, stakeholders say comprehensive fiscal and tariff reforms may be required to stabilise the sector and restore confidence among investors and lenders.