The Association of Power Generation Companies (APGC) has raised alarm over the worsening liquidity and infrastructure crisis in Nigeria's electricity market, warning that the situation threatens businesses, SMEs, and the broader economy.
Dr. Joy Ohaji, MD/CEO of APGC, said GenCos are currently owed ₦5.6 trillion, with a monthly shortfall of about ₦200 billion, leaving operators struggling to stay afloat. "This is an existential threat to the Nigerian economy, considering the role of power in economic development," she said in an interview with ARISE News.
She lamented delays in the federal government's plan to issue a bond to clear the debts, saying bureaucratic bottlenecks have slowed action. Beyond liquidity, she highlighted that grid instability and regulatory directives, such as mandatory "free governor mode" installation by December, could push some GenCos off the grid.
With capital requirements like $800,000 per plant for compliance, Ohaji argued that GenCos cannot meet obligations while weighed down by debts. She urged Nigeria to adopt Ghana's "cash waterfall" model, which prioritises payment to GenCos to ensure sustainable generation.
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"For every ₦100 of a GenCo's invoice, ₦70 goes to gas. If government handles gas directly, tariffs will reduce," she explained, while also calling for dedicated gas allocations through joint ventures with oil companies.
The APGC boss pressed for political will, competent sector leadership, and a stress test across generation, transmission, and distribution to determine real system capacity. Despite Nigeria's 14,000MW installed capacity, only about 4,500MW is generated, leaving SMEs and industries grappling with erratic supply.
"GenCos are patriotic investors, but patriotism cannot continue to generate power," Ohaji warned, stressing that unless the liquidity and gas supply challenges are resolved, businesses and households will face worsening blackouts.
