FG Moves to Prevent Power Blackout Over ₦4tn Debt

The Federal Government is scrambling to avert a possible blackout across the country as electricity generation companies (GenCos) threaten to down tools over an outstanding debt of about ₦4 trillion.

Investigations revealed that the GenCos are owed over ₦2 trillion in legacy debts and about ₦1.97 trillion for the year 2024 alone. This comes as the Federal Government has also failed to settle ₦450 billion owed to power distribution companies (DisCos) as part of the electricity subsidy for 2024.

The Executive Secretary of the Association of Power Generation Companies, Dr. Joy Ogaji, said GenCos are under immense pressure due to the financial shortfall. She warned that the sustainability of power generation is at risk if the debts remain unpaid.

Minister of Power, Adebayo Adelabu, acknowledged that the subsidy burden is becoming unsustainable and emphasized the need for a more targeted subsidy model. He also noted that poor investment by DisCos in network infrastructure has affected the shift of consumers to cost-reflective tariffs, worsening the situation.

The GenCos have made several demands, including the immediate implementation of a debt repayment plan and the provision of a payment security mechanism backed by international financial institutions. They are also asking the government to ensure full settlement of their invoices and cover obligations in the recent MYTO Supplementary Order and the Distribution Reimbursement Obligation.

Stakeholders warn that if these issues are not urgently addressed, Nigeria could be plunged into a major electricity crisis, with widespread blackouts and grid instability.