Nigeria is on the verge of a major energy crisis as gas companies reduce their supply to power plants due to an outstanding N5.6 trillion debt owed to power generation companies.
This development has raised serious concerns about the stability of the national grid and the country’s ability to sustain its electricity supply.
The Managing Director/Chief Executive Officer of the Association of Power Generation Companies, Dr Joy Ogaji, confirmed the development in an interview, warning that the situation could push Nigeria deeper into darkness if not urgently addressed. According to Ogaji, the liquidity crisis in the sector has spiralled out of control, with an additional N1.6tn debt accumulating from January to August 2025, bringing the total outstanding to N5.6tn.
The APGC boss revealed that GenCos’ monthly invoices average N270bn, but only about N70bn is paid, leaving N200bn outstanding every month. She faulted the 2025 federal budget, which earmarked N900bn for the power sector without cash backing, calling it grossly inadequate.
Ogaji urged the Federal Government, the Nigerian Electricity Regulatory Commission, the Debt Management Office, and the Nigerian Bulk Electricity Trading Plc to urgently engage GenCos on viable solutions. She questioned whether the proposed promissory notes would be exclusive to GenCos or open to other government contractors.
“GenCos remain patriotic investors, but patriotism alone cannot run power plants. Without urgent action, Nigeria risks another round of prolonged blackouts,” Ogaji warned. The situation is further complicated by the fragility of the national grid, which has been experiencing frequent disruptions.
The Transmission Company of Nigeria confirmed some recovery on the national grid, with power generation climbing to nearly 4,000 megawatts. However, several power plants are yet to resume full output, underscoring the fragility of the system.
The energy crisis looming over Nigeria poses significant risks to the economy and the welfare of its citizens, highlighting the need for urgent intervention to address the debt burden and stabilize the power sector.