…As firms seek clear payment framework from govt
By Dickson Pat
Managing Director/Chief Executive Officer, Engr Jennifer Adighije, said her company has approached the bond market under the Federal Government’s power sector refinancing plan to raise funds aimed at settling outstanding government indebtedness to power generation companies ,GenCos.
Though, she did not disclose the actual amount requested under the bond arrangement, we can report that as of the middle of 2025, the Federal Government’s liabilities to GenCos had hit about N6tn in unpaid electricity subsidies and invoices.
Also in April, the Federal Government announced a plan to pay them N2tn of the N4tn debts before the end of the year.
But Adighije, who spoke recently at an event to mark NDPHC’s 20th anniversary in Abuja, said the move, which has the backing of President Bola Tinubu and the Minister of Power, is designed to unlock much-needed liquidity in the electricity value chain and stabilise power generation across the country.
According to her, the refinancing initiative is expected to be a game changer for Nigeria’s power sector, as it will ease the financial pressure on Gencos, improve their operational capacity, and ultimately support more reliable electricity supply nationwide.
She reaffirmed NDPHC’s commitment to strengthening Nigeria’s energy infrastructure and supporting national development.
The NDPHC MD noted that the company’s mandate goes beyond power generation, with significant interventions delivered across the transmission and distribution segments of the electricity value chain.
“In the transmission segment alone, we have added over 9,000 megavolt-amperes ,MVA, of installed transformer capacity, rolled out transmission substations, executed line-bay extensions, and constructed hundreds of kilometres of transmission lines across the country”, she said.
She added that under her leadership, NDPHC is adopting a more customer-centric approach while leveraging the provisions of the Electricity Act to deepen strategic collaborations.
The partnerships, she explained, span bilateral partners, eligible customers, regional partners under the West African Power Pool ,WAPP, and other market participants.
Adighije stated that the combination of infrastructure expansion, market-driven partnerships, and innovative financing through the bond market positions NDPHC to play a central role in resolving long-standing challenges in the power sector and accelerating Nigeria’s energy transition and economic growth.
Meanwhile Power Generation Companies ,GenCos, in Nigeria are pressing the federal government for a clear and sustainable payment framework to address the alarming N6 trillion debt burden suffocating the sector.
Despite a critical investors’ meeting with the President on July 25, 2025, the Chief Executive Officer of the Association of Power Generation Companies ,APGC, Dr. Joy Ogaji, revealed that there remains “no clarity on the bond issuance since July”, as the sector continues to bleed financially.
The delay and lack of transparency are exacerbating the liquidity crisis, threatening the commercial viability of power generation firms and casting doubt on Nigeria’s ability to stabilise its electricity supply industry.
Dr. Ogaji emphasised the urgent need for a comprehensive framework to tackle both legacy debts and ongoing payment challenges to prevent further collapse of the Nigerian power sector.
In a widely published interview, Dr. Ogaji issued a candid appraisal of the unresolved financial crises plaguing the power generation sector.
She said that nearly four months after a crucial meeting with the President in July 2025, the GenCos remained in the dark about critical bond issuance plans intended to address mounting financial pressures.
The debt crisis in the electricity market stems primarily from a chronic liquidity shortfall that has plagued the power sector for years.
GenCos and other power sector players are owed massive unpaid invoices and legacy debts, which have ballooned to over N6 trillion by 2025 due to tariff shortfalls, weak revenue collections, and delays in government payments.
This financial strain has caused gas suppliers to cut supply to some power plants, further destabilising the national grid and pushing Nigeria to the brink of widespread blackouts. Efforts to alleviate the crisis have been hindered by a lack of clarity and follow-up on government commitments, including the proposed bond issuance to cover the debt. Despite government promises and partial subsidies, the sector continues to suffer from inadequate funding, operational inefficiencies, and unclear payment frameworks, leading to an ongoing crisis of confidence among investors and stakeholders in Nigeria’s electricity market.
“There is no clarity at all on the bond since July 25, 2025, when the GenCos’ investors met with the President.
“We hear they are working on it, but when will they finish? When will it be issued? We are in November, and yet there is no clarity. Given that N4 trillion was allocated for 2024, an extra N2 trillion is accumulating with no visible sustainable plan to stop the haemorrhaging. There are more questions than answers”, she stated.
The liquidity crunch and growing legacy debts continue to threaten the operational viability of GenCos, with Dr. Ogaji emphasising the urgent need for an effective, comprehensive framework by the federal government.
“What we need as GenCos is a design or framework that can deal with solvency legacy debt and liquidity payment discipline”, she said.
This framework, she explained, must protect power generation companies from succumbing under the weight of outstanding debts and unpaid dues in the Nigerian Electricity Supply Industry ,NESI.
Highlighting the sector’s dire financial state, Dr. Ogaji said, “The Nigerian power sector faces significant challenges, including inadequate liquidity, which hinders the ability of power generation companies to operate efficiently and effectively, generating outstanding debts and threatening ongoing commercial viability.
“Payment solutions are required to cater for ongoing and legacy debts and to improve overall market liquidity.”
She outlined the APGC’s priorities for government and industry intervention to include debt assessment and restructuring.
“We need to assess and restructure existing and outstanding debts owed to and by the GenCos to enhance recovery prospects”, she said.
Ogaji called for the development of strategic support and negotiation frameworks to recover outstanding debts from previous periods.
According to her, to mitigate payment risks under existing Power Purchase Agreements ,PPAs, fiscal and regulatory mechanisms need restructuring.
“There must be risk allocation frameworks to ensure equitable distribution of financial risks among all stakeholders”, Ogaji said.
She also stressed the importance of developing performance improvement plans aligned with strategic goals, including integrating innovative models and emerging trends in problem-solving techniques to maximise power generation efficiency.
She asserted that an implementation roadmap for these solutions was critical to restore sector confidence and operational viability.
She cautioned against superficial remedies. “What we want is not box-ticking or knee-jerk solutions, but comprehensive, strategic approaches that address specific needs of power generation companies, enhancing their financial sustainability and operational efficiency”.
