The Chief Executive Officer of the Association of Power Generation Companies, Dr Joy Ogaji, in a press conference held in Abuja earlier this week has raised the alarm that the country’s power sector is teetering on the edge of collapse due to a debt burden that has now reached N6.5 trillion owed by the Federal Government to generation companies and gas suppliers, with no credible repayment plan in sight.
Ogaji confirmed that the total amount owed to GenCos stood at N4 trillion as of December 2024 and has since climbed to N6.5 trillion. She noted that the current monthly invoice for power generated by GenCos stands at about N280 billion, out of which roughly N200 billion remains unpaid every single month. “The payment is just about 35 percent and sometimes below that,” she said.
The consequences of that chronic underpayment are now showing up in real time on the national grid. As of March 5, 2026, total generation on the national grid stood at just 3,940.53 megawatts, already below expected capacity due to gas supply limitations. Between 6am and 8am that morning several generating units were forced to shut down due to inadequate gas supply, cutting a further 292 megawatts from available generation.
The gas supply shortfall is the most immediate crisis. Thermal plants require roughly 1,588.61 million standard cubic feet of gas per day to operate at optimal capacity. Actual supply has fallen to approximately 652.92 million standard cubic feet roughly 40 percent of what is needed.
Gas suppliers, themselves owed trillions of naira by generation companies who cannot pay because they themselves are not being paid, have cut deliveries to less than half of required volumes.
Hydro power plants have effectively become the last line of defence holding Nigeria’s grid together. Analysis of generation data from February 1 to 21 showed that Kainji, Jebba, Zungeru and Shiroro hydro plants alongside the Egbin steam plant contributed an average of 2,022 megawatts out of 4,497 megawatts produced during the period, meaning just five plants from the 27 connected to the grid were producing 45 percent of all electricity generated nationally.
Ogaji did not spare the Federal Government in her assessment. “Assumptions cannot buy gas for us to generate,” she said bluntly, describing the government’s N500 billion bond offering as completely inadequate.
She noted that President Tinubu had personally pledged N4 trillion to clear legacy debt during a July 2025 meeting with GenCos a promise she said has since been reduced to N500 billion with no clear financing plan for the remainder.
She warned that if nothing is done by December 2026, total sector debt could reach N8.8 trillion. The GenCos have also pushed back against a Presidency narrative that pegged the verified debt at N2.8 trillion. Ogaji categorically rejected that figure, describing it as false and challenging Presidency sources to publish audit documentation explaining how the number was computed. She insisted that the N2.8 trillion figure did not emerge from any officially concluded reconciliation process.
The association also revealed a deeply worrying structural problem as since the 2013 privatisation of the power sector, GenCos have been paid only about 35 percent of their invoices, leaving the remainder to accumulate as unpaid obligations over more than a decade. Many generation companies, they warned, are now technically insolvent as a result.
National generation has slipped to around 4,300 megawatts in recent weeks, forcing the grid operator to implement load shedding and cut electricity allocations to distribution companies to keep the system stable. Even wealthier consumers who recently received tariff increases based on their ability to pay are now receiving erratic electricity
With the Middle East war simultaneously driving fuel and diesel prices to record highs, Nigerians who cannot rely on the grid are now paying more than ever for the generator fuel that has become their primary source of electricity. The timing could not be more painful.
