The Power Generation Companies Association has expressed worries about being left out of the Federal Government's current debt verification and settlement process, aimed at resolving the N4tn debt owed to generation companies within the Nigerian Electricity Supply Industry.
In a letter dated September 24, 2025, and authored by its Chief Executive Officer, Dr. Joy Ogaji, the APGC stated that the inter-ministerial committee formed to address the debts owed to power generators fails to properly reflect the involvement of the GenCos, who are the direct counterparties and creditors.
The letter, directed to the Acting Managing Director of the Nigerian Bulk Electricity Trading Plc, Mr. Johnson Akinnawo, was a reply to a previous communication (Ref: NB/002574, dated September 17, 2025), in which NBET pledged to stakeholders that the Federal Government was accelerating a planned bond offering to address financial constraints within the power industry.
Although recognizing the government's involvement, the GenCos emphasized that their participation in the process was essential for maintaining transparency, precision, and equity in settling the significant debts.
They specifically asked for clarification regarding four matters: their official role in the reconciliation process, the procedure for submitting supporting documents and verifying numbers, the schedule and key deadlines for completion, and the final month for debt verification.
Although we value the Federal Government's dedication and NBET's promise that actions are being accelerated to resolve the liquidity issues in the power sector, we kindly request more information regarding Paragraph 4 of your letter, which mentioned the formation of an Inter-Ministerial Committee tasked with conducting additional verification and reconciliation of the debts owed to the GenCos.
The letter stated in part: 'Our concern is that this process, as it stands, seems to exclude the direct involvement of the GenCos, who are the real counterparties and creditors to the debt being discussed.'
Since the goal was to achieve a thorough and precise reconciliation resulting in a solution both parties can agree on, the GenCos asked for clarification regarding their involvement in the continuing reconciliation effort.
They also aimed to understand the process through which GenCos will be involved in supplying supporting documents, verifying numbers, and taking part in discussions that will eventually establish the confirmed debt amounts. This also covered the schedule for completing the exercise and important milestones, allowing GenCos to organize their activities efficiently and coordinate with the expected disbursement of funds.
Power plant operators sought to identify the specific month that would be used as the cutoff for debt settlement, enabling GenCos to compile and submit precise and current records for review.
As vital stakeholders, we firmly hold the view that our participation in these discussions is essential for maintaining transparency, precision, and timely handling of unresolved claims.
The letter ended with, 'We anticipate your quick explanation and direction on how GenCos can effectively engage in this initiative to assist the government's praiseworthy actions in reviving liquidity within the Nigerian Electricity Supply Industry.'
On Wednesday, the GenCos expressed new worries about the declining condition of the electricity sector, cautioning that if the Federal Government does not quickly carry out unified reforms, the industry faces further decline, leading to serious impacts on economic growth, investor trust, and national progress.
In a message of goodwill to Nigerians on the occasion of the nation's 65th Independence Day, the APGC stated that the generation segment of the power sector is currently at a "critical crossroads" because of increasing debts, operational difficulties, and insufficient assistance.
Ogaji, who signed the statement, expressed concern that power generation companies are facing significant financial and operational challenges. She pointed out that outstanding debts to the GenCos have exceeded N5tn, mainly because the Federal Government has failed to clear subsidy payments, which amount to more than N200bn each month.
As she stated, loyalty alone is insufficient to support the operators, particularly since gas suppliers, the essential component for thermal power stations, are progressively reducing their supplies and redirecting gas to different markets.
The central government accumulated a total of N536.4bn in electricity subsidy commitments during the first quarter of 2025, while facing challenges in settling more than N4tn in outstanding debt to power generation firms.
A report from the Nigerian Electricity Regulatory Commission revealed that the government's subsidy burden rose by N64.7bn, moving from N471.69bn in the final quarter of 2024 to N536.4bn in the first quarter of 2025.
As per the Commission, the N536.4bn represented 59.16 percent of the overall GenCo bill for the quarter. NERC mentioned that without tariffs that reflect actual costs, the government takes responsibility for bridging the difference between cost-reflective and approved tariffs through tariff subsidies.
However, for simplicity in management, NERC stated, "the subsidy is solely applied to the generation cost that DisCos pay to NBET at the source, in the form of a DisCo's Remittance Obligation."
Nevertheless, Power Minister Adebayo Adelabu consistently stated that the Federal Government was unable to fulfill this responsibility, resulting in increasing debts throughout the supply chain.
It was observed that gas providers have started reducing supply to power stations as a response to increasing unpaid bills.
Ogaji pointed out that this trend is getting worse, with gas companies owed trillions of naira. She cautioned that the knock-on effect would further limit power generation and worsen Nigeria's electricity problems.
In a recent discussion with GenCos, President Bola Tinubu is said to have recognized the magnitude of the debts but requested more time to confirm the details before authorizing any payments. This cautious stance has caused concern among industry players, as the financial strain keeps increasing each day.
Although operators appreciated the President's readiness to discuss the issue, they highlighted the need for immediate steps to avoid additional problems in electricity production and distribution.
They are also urging the relevant authorities to include them in the debt verification procedure.
The head of NBET had not responded to phone calls and messages received up to the time this report was submitted.
Provided by SyndiGate Media Inc.Syndigate.info).
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