 have warned that fresh liabilities estimated at ₦7 trillion could undermine the Federal Government.){kind=link}
₦7trn Debts Could Derail Power Sector Recovery, GenCos Warn
Electricity generation companies (GenCos) have warned that fresh liabilities estimated at ₦7 trillion could undermine the Federal Government’s ₦4 trillion Presidential Power Sector Debt Reduction Programme.
The GenCos, under the Association of Power Generation Companies, said while they support the government’s plan to issue bonds to settle verified debts, the initiative does not address the structural liquidity crisis in the power sector.
Association CEO Joy Ogaji told The PUNCH, “By the time you finish paying the ₦4 trillion over seven years, more than another ₦7 trillion has accumulated. How do we deal with that? What we are looking for is a sustainable solution.”
She explained that the bond programme only covers debts up to December 2024, while obligations from 2025 and 2026 continue to build because DisCos and NBET are not paying 100% of their monthly obligations.
Ogaji also questioned transparency in the first bond issuance of ₦501 billion, asking why the government had not disclosed the beneficiaries and amounts paid.
She argued that subsidies remain largely “on paper”, with no budgetary provisions to back them. “There is no monetary provision anywhere for subsidies, not even in the supplementary budget. It’s just being said,” she stressed.
Ogaji urged the government to define the level of subsidy it can afford and make clear budgetary allocations, rather than maintaining a blanket subsidy policy that fuels debt accumulation.
She concluded that without comprehensive market reforms and a sustainable funding framework, new liabilities will continue to pile up, threatening the long-term viability of the Nigerian Electricity Supply Industry.