Power Firms Demand Clear Plan On N6 Trillion Subsidy Debt

Nigeria’s electricity generation companies have asked the federal government to provide a clear payment plan to settle the over ₦6 trillion debt owed to them, warning that the power sector is on the brink of collapse without urgent action.

The firms say that despite assurances from the presidency during a high-level meeting in July, there has been no progress or transparency on the bond issuance that was meant to address the growing financial crisis.

The head of the Association of Power Generation Companies, Dr. Joy Ogaji, said that four months after the July 25 meeting with President Bola Tinubu, the industry has yet to receive clarity on how and when the government plans to issue the bond. She said the delay has deepened the liquidity crisis in the power market and crippled operations for many generation firms that are already struggling with massive unpaid invoices.

The debt problem, which has built up over years, comes from a mix of tariff shortfalls, poor revenue collection, and long delays in government payments. Power producers are unable to recover costs, gas suppliers have reduced fuel deliveries, and some plants have cut generation, leading to increased instability in the national grid. With about ₦4 trillion already recorded as unpaid in 2024 and an additional ₦2 trillion added this year, operators say the system is bleeding with no sustainable recovery plan in sight.

According to Dr. Ogaji, the uncertainty surrounding the bond issuance has eroded confidence among investors and stakeholders. She said the sector needs a comprehensive framework that tackles both legacy debts and ongoing payment discipline. Such a framework, she explained, should ensure solvency for the generation companies, guarantee regular payments, and prevent the accumulation of new debts.

She urged the federal government to restructure the power market by assessing and reorganising all outstanding debts, creating a proper risk-sharing arrangement among all stakeholders, and strengthening the fiscal and regulatory systems to protect investments. Ogaji said that any lasting solution must include a realistic roadmap, effective debt recovery mechanisms, and performance improvement plans to increase efficiency and reduce operational losses.

Dr. Ogaji warned that temporary or superficial solutions would only worsen the crisis, adding that the power generation firms need concrete and long-term measures to remain operational. Without a clear and credible payment framework from the government, she said, the entire electricity supply industry could face deeper instability, further endangering Nigeria’s already fragile power system.