Gencos warned the collapse that rose in the electricity sector, demanding urgent reform

The Nigerian power plant company (Gencos) has increased concerns about the worsening situation of the electricity sector, reminding that without urgent reform, the industry is more at risk of decreasing with terrible implications for economic growth, investor confidence, and national development.

In a goodwill message that marks the commemoration of Nigeria’s 65th independence, the Association of Power Plant Companies (APGC) describes the generating segment of the electricity value chain as a “critical intersection” due to increased debt, liquidity constraints, and operational barriers.

The APGC Chief Executive Officer, Joy Ogaji, who signed the statement, said that debt to Gencos has now exceeded ₦ 5 trillion, most of the uneasy subsidy payments that cost more than ₦ 200 billion monthly. He warned that “patriotism alone could not support the operator,” mainly because gas suppliers were increasingly diverting output from power plants.

“Without urgent, coordinated, and sustainable action, this sector is further risk of deteriorating, the situation that will have broad implications for national development, economic stability, and investor confidence,” Ogaji warned.

While recognizing new interventions to overcome market liquidity and stimulate private investment, Gencos emphasizes that these profits can be quickly reversed. “At the age of 65, the reality is that the segment of the generation of the chain of power stands at a critical intersection. Gencos is under a very large financial and operational pressure,” the association said.

APGC also denied viral claims on social media that the federal government had agreed to ₦ 4 trillion of the replies of debt financing to clean up the arrears owed to 27 power generation companies between 2015 and 2023.

Nigeria, although it has a capacity of more than 13,000 megawatts, continues to produce between 3,500mw and 5,000 MW, is limited by poor transmission infrastructure, gas deficiency, and lack of liquidity. Since the 2013 privatization exercise, this sector has been hampered by financial ignorance, cost reflective rates, and uncertainty of regulations.

APGC reiterated that unpaid debts, estimated ₦ 5.6 trillion last month, pose a big threat to the survival of the operator. He argues that the failure to complete obligations, give incentives to gas supply, and expanding Transmi8Sion investment can trigger collapse in all sectors.

“Progress made so far is at risk of reversal if the liquidity challenge is not resolved, if the investment is not given incentives, and if the tariff does not reflect the actual power costs,” Ogaji said, adding that electricity supply is still important for industrial growth, employment creation, and poverty reduction.

The association praised Nigeria’s resilience, noting that the commemoration of independence must function as a reminder of the need to turn the electricity sector into a sustainable development machine.

“Unless the courageous steps are taken to complete the challenges of liquidity, provide incentives to investment, and guarantee cost reflective rates, the dream of a stable power supply will remain difficult to understand, even when the country moves closer to the seventh decade of its national decades,” the statement concluded.