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Gencos Warn as FG’s Debt Surpasses N5.2 Trillion
Power Generation Companies (Gencos) have raised alarm over the mounting debts owed by the Federal Government, revealing that arrears hit N1.2 trillion in the first half of 2025 alone. According to them, total outstanding debts, including legacy debts of N1.9 trillion from 2015 to 2024, and another N2 trillion from 2024 have now ballooned to approximately N5.2 trillion.
The Association of Power Generation Companies (APGC), through its Executive Secretary, Dr. Joy Ogaji, issued a statement in reaction to reports suggesting that the Federal Government may absorb the burden of electricity subsidies introduced by the Enugu Electricity Regulatory Commission (EERC), which recently reduced tariff from N209 to N160 per kilowatt-hour.
The Gencos expressed concern that the tariff decision in Enugu could set a precedent for other states. They noted that under the current tariff structure, only N45 out of the N112 allocated is designated for power generation, raising alarm over the implications for electricity decentralisation to state governments.
Dr. Ogaji clarified that there is no official federal policy backing the subsidies and described the situation as unchecked debt accumulation. She noted that although Gencos issue monthly invoices averaging N250 billion, the 2025 national budget allocates just N900 billion for the entire year and even that is not fully cash-backed.
“This is a serious systemic risk that must be addressed at the presidential level,” Ogaji said. “The federal budget is grossly inadequate to settle existing arrears and projected deficits.”
Despite consistently meeting and exceeding their generation capacity requirements, Gencos say they have never received full payment, nor have they had guaranteed gas supply, timely remittance, or protection against grid inefficiencies. Additionally, the sector is heavily impacted by foreign exchange volatility, with over 90% of operational costs denominated in dollars, while inefficient grid operations continue to drive up maintenance expenses.