…FG drowning in power debt; GenCos warn of collapse
Nigeria’s electricity market is on the brink of total collapse, as debts to power firms spiral to ₦5.6 trillion and premium customers abandon the national grid in droves.
According to a published report at the weekend, the Federal Government already owes generation companies (GenCos) ₦4 trillion in legacy arrears, while fresh debts hit ₦1.6 trillion by August, and could reach ₦2.2 trillion by December, pushing total liabilities to ₦6.2 trillion.
Sources at the Nigerian Electricity Regulatory Commission, (NERC), said the share of commercial customers still relying on the grid has dropped to 13%, down from 20%, as grid unreliability and rising costs drive migration to alternative energy. According to reports, manufacturers spent a record ₦1 trillion on self-generation in 2024, while premium households are increasingly turning to solar power.
In 2024 alone, NERC licensed 24 bulk consumers to generate their own power, and another 22 for off-grid projects, both adding about 289 megawatts of capacity outside the national grid. In 2025, Jigawa, Zamfara, Lagos, Delta, and Katsina already signed renewable energy deals while the Federal Government plans to remove its agencies from the grid, leaving the national grid with households without capacity for solar, or businesses without gas-fired plants.
With the exit, the Government faces about ₦200 billion tariff shortfall monthly, as the current administration has been unable to keep to promises on the frozen electricity tariff.
Despite repeated assurances, industry players fear that the Government lacks a clear strategy to settle GenCos’ debts with interventions from President Bola Tinubu and Finance Minister, Wale Edun, seen largely as efforts to ease tensions rather than provide a sustainable solution.
Once-reliable commercial users, now make-up just 13% of grid customers, with manufacturers and wealthy households fleeing to solar and self-generation. Industry players warn that the monthly ₦200 billion tariff shortfall is unsustainable.
GenCos say enforcing NERC’s compulsory Free Governor Control (FGC) to prevent grid collapse could add another ₦1.059 trillion yearly burden – a cost the Government cannot currently cover.
With only 27% of monthly invoices paid, operators accuse the Government of lacking a credible repayment plan. “This is less a technical crisis than a financial one”, said Azura Power MD, Edu Okeke.
When a request for a clear plan on the debt payment was made to the Director, Press and Public Relations at the Ministry of Finance, Mohammed Ɗanjuma Manga, there was no response as of press time.
Analysts warn that without urgent intervention, the grid could soon be left to the poorest Nigerians, while industry and the rich run on solar and gas — leaving the National Grid broke, unstable, and irrelevant.
