Business

JUST IN: FG scrambles to avert Gencos shutdown over N4tn debt

Published

9 months ago

April 15, 2025

248 Views

Minister of Power has pledged to address N4tn electricity debt owed by GenCos, which saw the electricity distribution companies threatening a shutdown on Monday.

Weighing in on the development, the special adviser to the Power Minister, Bolaji Tunji, said the government is aware of the development and is making concrete steps to resolve the lingering issue.

He said as part of the steps taken by the government, the Ministry of Finance will take charge of the payment very soon.

The media aide responding on Monday said, “We are not unaware of this debt arising from the FG’s commitment on subsidy. Part of the debts are legacy debts, which were on the ground before the Minister of Power assumed office.

The Minister of Power has repeatedly harped on this, knowing the implication of such debts to the operations of the various power sector stakeholders, especially the GENCOs.

The Minister of Power is very much concerned.

“The issue is being discussed with the Ministry of Finance, making a case for how the debt must be paid. We expect the Ministry of Finance to take action on this soon.

”A nationwide blackout looked imminent as the 23 power generation companies warned that they can no longer guarantee a steady electricity supply due to the worsening liquidity crisis in the electricity market, with outstanding debts now exceeding N4tn, comprising N2tn for power supplied in 2024 and N1.9tn in legacy debts.

The firms, under the aegis of the Association of Power Generation Companies, raised the alarm in a statement issued on Monday and signed by the Chairman of the Board of Trustees, Col. Sani Bello (retd.).

They said the debt burden and operational constraints currently facing the companies could force an imminent shutdown of power plants if urgent interventions were not implemented.

The companies noted that plants were being paid less than 30 per cent of monthly invoices for power supplied to the national grid.

They warned that the continued non-payment for electricity generated and consumed on the national grid was pushing the Nigerian power sector towards a total collapse.

The statement, titled ‘Over N4tn unpaid invoices threaten GenCos imminent shutdown’, lamented the lack of a clear financing plan from the Federal Government, alongside worsening fiscal and operational constraints within the Nigerian Electricity Supply Industry.

They also accused the Nigerian Bulk Electricity Trading Plc and other stakeholders of neglecting GenCos in the application of the NESI’s “waterfall arrangement”, which sees other service providers receive 100 per cent of their market invoices while GenCos get as little as 9 per cent to 11 per cent of what is due.

The statement read, “The Power Generation Companies (‘GenCos”) are constrained to issue this press release to draw the attention of the Federal Government and key stakeholders to the need to urgently address the issue of inadequate payment for electricity generated by them and consumed on the national grid, which is currently threatening the continued operation of their power generation plants.

Against the backdrop of the many challenges facing the power sector in Nigeria, the crises from cash liquidity are on the top burner and have reduced GenCos’ ability to continue to perform their obligations, thereby threatening to completely undermine the electricity value chain.

“In light of the severity of the issues highlighted above, the GenCos are requesting that immediate and expedited action be taken to prevent national security challenges that may result from the failure of the GenCos to sustain steady generation of electricity for Nigerians.”

Recall that in February, the Minister of Power, Adebayo Adelabu, disclosed that the government owes electricity generation companies and electricity distribution companies over ₦4 trillion in electricity subsidies.

Giving a breakdown, the minister said N2 trillion is owed to GenCos as legacy debt, while another N1.9 trillion is owed to them as part of the electricity subsidy for 2024, while DisCos are owed N450 billion for the 2024 electricity subsidy.

In the statement released under the umbrella of the Association of Power Generation Companies, the GenCos expressed deep frustration over what they described as “inadequate payment for electricity generated and consumed on the national grid.

They described it as a major threat to the viability of their power plants.

The group said despite investing significantly in ramping up generation capacity since the sector’s privatisation in 2013, the absence of firm contracts, poor enforcement of power purchase agreements, and persistent non-payment of invoices have crippled their operations.

The companies also pointed out that hopes of being settled through external support mechanisms like the World Bank’s Power Sector Recovery Operation have been dashed due to other market players’ failure to meet required performance targets.

The statement reads, “GenCos, on their part as responsible investors with patriotic zeal, have made large-scale investments and have continued to demonstrate absolute commitment by ramping capacities in line with their contract over these 10 years, amid system constraints, policies & regulations that are not investor-friendly, increasing debts owed by the FGN without a clear financing plan, a lack of firm contracts and a market without securitisation but based on best endeavours, thereby hampering future planning.“

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

The GenCos expectations of being settled through external support, such as the World Bank PSRO, have also been dampened due to other market participants’ inability to meet their respective distribution-linked indicators, enshrined in the Power Sector Recovery Program.”

To avert a total shutdown of power generation across the country, the GenCos issued a list of urgent demands to the Federal Government: The GenCos warned that unless urgent and coordinated steps are taken to address the liquidity crunch, Nigeria’s electricity supply could collapse, with dire consequences for national security, economic growth, and public welfare.

The GenCos added, ” In light of the severity of the issues highlighted above, the GenCos are requesting that immediate and expedited action be taken to prevent national security challenges that may result from the failure of the GenCos to sustain steady generation of electricity for Nigerians.

“The 2024 collection rate has dropped below 30 per cent, and 2025 is not any better, severely affecting GenCos’ ability to meet financial obligations.

Tax and Regulatory Challenges: High corporate income tax, concession fees, royalty charges, and new FRC compliance obligations are further straining GenCos’ revenue.

GenCos are currently owed about N4 trillion (N2 trillion for 2024 and N1.9 trillion in legacy debts). No possible solutions, including cash payments, financial instruments, and debt swaps, are in sight.

“The 2025 government budget allocates only N900 billion, raising concerns about its adequacy to cover arrears and future payments.

The power generated by GenCos has continued to be consumed in full without corresponding full payment, notwithstanding the commencement of the Partial Activation of Contracts in the NESI, which took effect from July 1, 2022; the minimum remittance order; bilateral market declaration; waterfall arrangement; the risks of inflation; forex volatility with no dedicated window to cushion the effect of the forex impact; or the supplementary MYTO order, which leaves about 90 per cent of GenCos monthly invoices unmet without a bankable securitisation or financing plan.

This situation has dire consequences for the GenCos and, by extension, the entire power value chain”.

The companies that called for the implementation of payment plans to settle all outstanding GenCos invoices observed that “the flow of money within the power industry is one of the fundamental problems preventing Nigerians from enjoying continued and sustainable improvement in electricity supply”.

Meanwhile, the Managing Director and Chief Executive Officer of the Niger Delta Power Holding Company of Nigeria, Engr Jennifer Adighije, says President Bola Tinubu is intervening to settle the liquidity crisis in the power sector.

Adighije stated this recently while being honoured as the Young Achiever of the Year at the 2025 Energy Times Awards for her contributions to the power sector.

Speaking with newsmen at the award presentation dinner, the managing director described the award as a humbling experience, especially for a new management team that has been in the office for less than a year.

According to her, the central issue in the power sector is about liquidity, and once there is enough cash flow, the issue will be resolved.

Business

Mikano & Changan Named Founding Infrastructure Partners for Lagos Gran Fondo “EKO 170”

Published

22 hours ago

January 9, 2026

Charles Flames

25 Views

The organisers of Nigeria’s premier cycling event, the inaugural Lagos Gran Fondo “EKO 170” are proud to announce Mikano International Limited and Changan as the Official Platinum and Founding Infrastructure Partners.

The landmark 170km mass-participation cycling race is set to take place on January 11, 2026, showcasing Lagos as a global hub for sports tourism, healthy living, and sustainable mobility.

This strategic partnership forms the operational foundation of the event, with Mikano and Changan providing essential in-kind support. This includes official race vehicles from Changan’s range of reliable and innovative automobiles (distributed exclusively in Nigeria through Mikano Motors), power generation solutions from Mikano’s renowned expertise in energy systems, medical services, and comprehensive rider support throughout the challenging route.

The collaboration highlights a shared dedication to safety, excellence, and sustainability, aligning perfectly with the event’s goals and the Lagos State Government’s vision for innovative, world-class initiatives.

Endorsed by the Lagos State Government, the EKO 170 Gran Fondo will start and finish at the iconic Eko Atlantic City, taking riders through Victoria Island, across the Lekki-Ikoyi Link Bridge, along the Lekki–Epe Expressway to Epe, and back — offering participants a unique view of Lagos’s coastal beauty, modern infrastructure, and vibrant energy.

The event is expected to attract over 1,000 cyclists, from elite professionals to enthusiastic amateurs, from Nigeria and internationally.

As the exclusive Power and Infrastructure Partner, Mikano and Changan will receive prominent branding visibility across all event platforms.

A highlight of the partnership includes the introduction of a Mikano Clean Energy Hub at the finish-line festival, demonstrating cutting-edge sustainable power solutions.

With the foundational backing of Mikano International Limited — a leading Nigerian provider of power generation, automotive, and industrial solutions — and Changan — a globally respected automotive brand known for performance, safety, and innovation — the Lagos Gran Fondo “EKO 170” is poised to deliver an unforgettable, world-class cycling experience.

Participant registration remains open at www.eko170.com. Cyclists and supporters are encouraged to join this historic event that celebrates Lagos’s resilience and forward-thinking spirit.

Media Contact: Sabatha Joshua Media Relations, Lagos Gran Fondo “EKO 170”.

This partnership marks a significant milestone in elevating Lagos on the global stage through sports, infrastructure excellence, and community-focused innovation.

Business

CBN’s N500bn capital base: 14 banks to close operations or merge

Checks by our Reporter shows that the affected banks include First City Monument Bank (FCMB), Unity Bank, Keystone Bank, Union Bank (now Titan), Taj Bank, Standard Chartered Bank, Parallex Bank, and SunTrust Bank…

Published

1 day ago

January 9, 2026

OCHEFA

33 Views

Fourteen banks have not met the Central Bank of Nigeria ‘s recapitalisation requirements .The deadline is March 31.

Others are FBH Merchant Bank, Rand Merchant Bank, Coronation Merchant Bank, Alternative Bank, and other non-interest banks.

However, nineteen banks have met the N500 billion minimum capital benchmark .

They include Access Bank, Fidelity Bank, First Bank, GTBank (GTCO), UBA, Zenith Bank, and twelve others.

Business

Why Tax Reforms Benefits Will Be More Than The Shocks – Kupoluyi, LCCI President

…The harmonisation of taxes will be a relief to companies that have been paying over 16 taxes.

Published

1 day ago

January 9, 2026

OCHEFA

46 Views

The newly elected President of Lagos Chamber of Commerce and Industry (LCCI), Mr Leye Kupoluyi, spoke with ThisdDay Newspaper about the chamber’s advocacy focus during his tenure for the next two years. Excerpt:

What will be the direction of LCCI’s advocacy under your leadership?

Thank you so much for this question. As you know advocacy is one of our major mandates as a chamber because of the different interests that we are representing.

Under my leadership we will carry on advocacy as usual as evidence based engagement on how to strengthen Nigeria’s productive capacity and enhancing business generally.

Our advocacy will be for competitiveness of Nigerian businesses beyond the borders of Nigeria.

The chamber will focus on advocacy that will enable Nigerian companies to be very well competitive within Nigeria and in Africa because it is now a borderless economy.

Do Nigerian companies have the muscle to push their competitiveness beyond the country?

If we do not have the muscle then we have to develop it. But truly we have the muscle to push it. Nigeria is the hope of Africa.

Arguably Nigeria is the largest economy in Africa. I do not want to go into the statistics of people saying which country has the largest economy because there is no country in Africa that is bigger than Nigeria.

Therefore, if we cannot take the lead in Africa then there is no one to do it. There is no doubt that Nigeria is the arrow head of Africa.

What’s your reaction to the shrinking West African market for Nigerian products due to the exit of Burkina Faso, Mali and Niger Republic from ECOWAS?

There are challenges in terms of organised legal exports to these countries even though most of the manufactured goods they require still come from Nigeria.

But definitely there are challenges in terms of doing business the way we know it at this chamber, which is formal, legal and legitimate trade and not through smuggling.

Informally, Nigerian goods are reaching these countries but there are challenges when it comes to formal trade. And we know that ECOWAS leaders are doing everything possible to bring these countries back into the fold.

What do you think will be the immediate impact of the implementation of the new tax laws from January 1, 2026?

Thank you very much. For every reform like Nigeria’s tax reform there must be some shocks and benefits.

But with the tax reforms we know that the benefits will be more than the shocks. It is a very good relief that the low income earners have been removed from the tax net.

The multiple taxations that have been an epidemic in Nigeria’s business environment for many years will be taken care of.

The tax reform must not be a burden to the people. It will unlock lots of revenues for the government because the tax net has been widened and strengthened. Also the harmonisation of taxes will be a relief to companies that have been paying over 16 taxes.

The reform will make the environment predictable because we will know where we are going. Its implementation will be transparent as we move along and be beneficial to both the government and the tax payers.

But we should wait to see how it goes in January. In our own case we keep enlightening our members and sending the feedback to the government.

Under my leadership we will carry on advocacy as usual as evidence based engagement on how to strengthen Nigeria’s productive capacity and enhancing business generally.

What’s your take on public apprehensions regarding the implementation of the tax reform?

Those of us in the orgnised private sector are looking at it as a relief because those multiple taxation will go, low income earners exempted, the tax net expanded and that the tax system made more transparent and harmonised. If these are achieved it will bring big relief to the organised private sector.