Power Generation Companies (GenCos) have appealed to the Federal Government and other stakeholders in the electricity value chain to urgently settle more than N4 trillion owed for power already generated and supplied to the national grid.

The Chairman of the Board of Trustees of the Association of Power Generation Companies (APGC), Col. Sani Bello (rtd), made the appeal in a statement issued in Abuja on Monday.

Nigeria currently has 23 power plants connected to the national grid.

According to Bello, GenCos are owed about N2 trillion for electricity supplied in 2024, in addition to N1.9 trillion in legacy debts, bringing the total outstanding invoices to nearly N4 trillion, with no bankable securitisation or financing plan in place.

“GenCos are currently being owed about N4 trillion — N2 trillion for 2024 and N1.9 trillion in legacy invoices unmet without a bankable securitisation or financing plan,” he said.

He warned that the worsening liquidity crunch is threatening the continued operation of generation plants across the country.

Beyond the huge debts, Bello noted that GenCos are operating under harsh monetary and fiscal conditions, which have further strained their sustainability.

“It is no more news that the GenCos have continued to bear the brunt of the liquidity crisis in the Nigerian Electricity Supply Industry (NESI),” he said.

He added that, despite the challenges, the companies had demonstrated commitment and patriotism by investing heavily and ramping up capacity in line with contractual obligations over the past decade.

“This is amid system constraints, policies and regulations that are not investor-friendly, and increasing debts owed,” he said.

“Notwithstanding these and other severe difficulties the GenCos have battled with since the 2013 takeover, they have kept to the terms of their contractual agreements by ramping up capacity, which has been largely constrained systemically.”

Bello said the liquidity crisis remains the most pressing challenge in the sector and has significantly reduced the companies’ ability to meet their operational and contractual obligations.

He explained that expectations of financial relief through external support had been dampened because other market participants had failed to meet their respective Distribution Linked Indicators (DLIs) under the Power Sector Recovery Programme (PSRP).

Access to foreign exchange also remains a major concern, he said, noting that most operation and maintenance requirements in the generation sub-sector are dollar-denominated.

He stressed the need for a dedicated forex window or a stable dollar allocation framework for GenCos.

“GenCos are of the position that there is the need for a coordinated approach by all stakeholders in the NESI to address the liquidity issue realistically and sustainably in the power sector, so that Nigerians can have access to reliable electricity supply,” Bello said.

He urged immediate and expedited action to prevent a collapse in generation capacity and called for investor-focused, growth-friendly policies and regulations to boost confidence.

Such reforms, he said, should include improved monitoring and implementation mechanisms, as well as liberalisation of the market through bilateral arrangements.

According to him, bilateral contracts would deepen market confidence, enhance the sector’s viability and creditworthiness, and ensure stricter enforcement of market rules by the regulator.