Nigeria’s electricity crisis worsened on Tuesday as several power generation companies (GenCos) shut down plants under the weight of a N6.8 trillion debt burden, crippling output and threatening further blackouts nationwide.
Industry data showed that 16 of the country’s 33 power plants were not generating electricity, while the remaining facilities produced just 3,705 megawatts—far below national demand and Nigeria’s modest average of about 4,000MW.
Operators blamed the shutdowns on acute liquidity challenges that have left them unable to maintain equipment, pay for gas supplies, or meet basic operating costs.
“We cannot maintain the machines,” said Joy Ogaji, Chief Executive Officer of the Association of Power Generation Companies, warning that the cash crunch has reached critical levels.
Figures indicate the debt—owed to GenCos for electricity generated—has accumulated since 2015 and is rising by about N200 billion monthly. The situation has also disrupted the broader energy value chain, with generation companies now owing gas suppliers and transporters about 60 per cent of what they are owed.
Gas-fired plants account for nearly 70 per cent of Nigeria’s electricity generation, making steady fuel supply crucial. However, suppliers are increasingly demanding payment guarantees before continuing deliveries, worsening the generation shortfall.
The crisis has pushed operators to the brink. Some GenCos have taken bank loans to stay afloat, while others struggle to pay salaries. In some cases, owners have pledged personal assets as collateral to secure financing.
Despite being Africa’s largest economy, Nigeria continues to face chronic power shortages, with only about half of the population connected to the national grid and most consumers experiencing frequent outages.
In response, the Federal Government plans to raise N4 trillion through domestic bonds to offset part of the sector’s long-standing debt. The move is aimed at clearing arrears owed to GenCos and gas suppliers, though only a fraction of the funds has been raised so far.
While stakeholders have welcomed the intervention, concerns remain over its slow implementation and whether it will be enough to halt the mounting debt and stabilise the sector.
Analysts say without urgent reforms to improve revenue collection and address structural inefficiencies, the liquidity crisis could worsen, forcing more plants offline and deepening Nigeria’s power deficit.
