Nigeria Risks Blackouts as GenCos cut supply over N5.6tn debt, raising fears of grid collapse and deeper crisis in the power sector

The move threatens the stability of the national grid and the country’s already fragile electricity supply.

Also read: ‘Lack of access’ GenCos owe gas suppliers N1.75trillion

Dr. Joy Ogaji, Managing Director of the Association of Power Generation Companies (APGC), confirmed the development in an interview on Thursday.

She warned that unless urgent steps are taken, the liquidity crisis in the power sector could plunge Nigeria into prolonged darkness.

This comes just days after a national grid collapse left millions without electricity. Although partial restoration has brought generation back to about 4,000 megawatts, many plants remain below capacity due to limited gas supply.

Ogaji explained that about 60 percent of GenCos’ revenue is paid directly to gas suppliers. With unpaid invoices piling up, suppliers have begun cutting deliveries, further reducing generation output.

“Gas suppliers have already started reducing supply. There are critical maintenance works, spare parts to purchase, and creditors who will no longer wait. Patriotism alone cannot run power plants,” Ogaji said.

Between January and August 2025, GenCos added N1.6 trillion in new debt, raising the total outstanding to N5.6 trillion.

President Bola Tinubu had earlier approved, in principle, a N4 trillion bond programme to settle the liabilities, but nearly two months later, operators say there has been no follow-up.

Ogaji also faulted the 2025 federal budget’s N900 billion allocation to the power sector, describing it as inadequate and without cash backing.

She expressed skepticism over the Federal Government’s proposal to settle debts with promissory notes, warning that such instruments expose GenCos to refinancing and credit risks.

She stressed that the current market structure discourages investment and urged urgent reforms involving the Nigerian Bulk Electricity Trading Plc (NBET), the Nigerian Electricity Regulatory Commission (NERC), and the Debt Management Office (DMO).

Industry experts fear that if the crisis persists, businesses and households could face more frequent outages, worsening Nigeria’s economic outlook.

Efforts to reach the Minister of Power, Adebayo Adelabu, for comment were unsuccessful. Meanwhile, the Transmission Company of Nigeria confirmed that power generation had recovered slightly to nearly 4,000MW but warned the system remained fragile.