Nigeria's Power Generators: Unpaid Electricity Bills Hit N6 Trillion, Reject NLC Extortion Claims
Power generation companies in Nigeria have disclosed that unpaid invoices for electricity supplied to the national grid have escalated to approximately N6 trillion, highlighting severe financial strain within the country's energy sector. The Association of Power Generation Companies, representing electricity generation firms nationwide, made this revelation, pointing to persistent revenue shortfalls and inadequate remittances across the power value chain as primary culprits.
Mounting Debt Burden Cripples Operations
According to the association's Chief Executive Officer, Joy Ogaji, the staggering debt accumulation has severely hampered the ability of generation companies to fund essential maintenance, purchase fuel, and expand capacity. This financial squeeze threatens to undermine Nigeria's already fragile power supply, with over 20 member companies bearing the brunt of the liquidity crisis. The GenCos, entitled to about 60% of market receivables based on invoiced energy, now face unprecedented arrears that exceed N6 trillion.
The association attributes this dire situation to systemic issues within the privatized power sector, including revenue collection gaps, tariff shortfalls, and market inefficiencies that have persisted since the 2013 privatization. Industry analysts warn that mounting debts owed by bulk traders and distribution firms to generation companies could lead to further declines in power generation, with broader implications for economic productivity and industrial growth.
Rejection of NLC Allegations
In a firm response to recent comments by the Nigeria Labour Congress, which accused electricity firms of engaging in institutionalized extortion and benefiting from alleged hidden subsidies, the association labeled these claims as inaccurate and inflammatory. Ogaji emphasized that such allegations overlook the structural liquidity challenges facing the sector and misrepresent the legitimate operations of GenCos.
While we acknowledge the frustrations of Nigerians regarding unstable power supply, we must firmly reject the NLC's characterization of the sector's challenges, she stated. The association warned that accusations of phantom subsidies and extortion risk undermining ongoing efforts by stakeholders to stabilize the electricity market and could discourage much-needed investment.
Openness to Scrutiny and Call for Constructive Engagement
The Association of Power Generation Companies declared its readiness for forensic examination of its members' financial records, asserting that GenCo books are open for scrutiny if required by the NLC or any other institution. If the NLC and any other institution find it necessary, GenCo books are ready for any forensic examination. But the facts must be established and the real causes of the sector's challenges identified, the statement added.
The group also dismissed suggestions that government financial support to the sector was politically motivated ahead of elections, describing such insinuations as baseless. It urged policymakers and labour leaders to engage constructively to resolve longstanding structural issues, emphasizing that continued misrepresentation of the industry's financial realities could further weaken electricity supply.
Labour Threats and Broader Implications
The latest exchange follows remarks by NLC President Joe Ajaero, who accused electricity firms of exploiting consumers through tariff adjustments and alleged subsidy arrangements, with the labour union threatening industrial action over the matter. Despite several government interventions, including payment assurances and financing support schemes like the recent N501 billion bond issuance to address historic debts, the sector continues to face funding gaps that limit investment in infrastructure and capacity expansion.
The GenCos reiterated their commitment to sustaining electricity generation but stressed that without addressing liquidity constraints, Nigeria risks exacerbating its power crisis. The association's disclosure underscores the urgent need for comprehensive reforms to ensure financial stability and reliable electricity service delivery for over 12 million customers across the country.
