Connect with us

Business

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

Published

on

189 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.“

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 undermine the electricity value chain completely.

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

Dangote Targets Nigeria Festive Season Monthly Supply of 1.5 billion litres of PMS

This represents 50 million litres per day. We are formally notifying the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) of this commitment.

Published

on

By

27 Views

Dangote Petroleum Refinery says that it has concluded arrangements to supply over 50 million litres of petrol per day into the Nigerian market this festive season (December to January).

The company said that the decision was taken to ensure that there is no shortage of the product during the festive season.

This translates to 1.5 billion litres of Premium Motor Spirit (PMS) for the month of December.

The same amount of product will also be supplied in January 2026, it was added.

President and Chief Executive of Dangote Industries Limited, Aliko Dangote, announced the plans.

Dangote said: “In line with our commitment to national well-being, and consistent with our track record of ensuring a holiday season free of fuel scarcity, the Dangote Petroleum Refinery will supply 1.5 billion litres of PMS to the Nigerian market this month.

This represents 50 million litres per day. We are formally notifying the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) of this commitment.

We will supply another 1.5 billion litres in January and increase to 1.75 billion litres in February, which translates to over 60 million litres per day.”

Speaking during a visit by the South-South Development Commission (SSDC) to the refinery and the Dangote Fertiliser complex, he stated that the facility currently has adequate stock and is producing between 40 and 45 million litres of PMS daily.

He added that the daily supply of 50 million litres should dispel long-standing claims that domestic refineries lack the capacity to meet national demand.

Continue Reading

Business

Dangote Partners Honeywell International to Boost Refinery Capacity to 1.4 million barrels per day

Published

on

61 Views

Dangote Refinery, Africa’s largest single-train petroleum refinery, has signed a landmark contract with U.S. industrial giant Honeywell International to execute a significant capacity upgrade that will boost the facility’s crude processing capability from the current 650,000 barrels per day to an ambitious 1.4 million barrels per day.

The multi-billion-dollar project, described by sources close to the deal as one of the largest refinery expansion initiatives globally in recent years, will involve the installation of advanced process units, automation systems, and energy-efficiency technologies supplied and integrated by Honeywell UOP and Honeywell Process Solutions.

Aliko Dangote, President and CEO of Dangote Industries Limited, confirmed the partnership, stating: “This strategic collaboration with Honeywell will position the Dangote Refinery as one of the top five largest refineries in the world by capacity.

The upgrade will not only enhance our ability to meet Nigeria’s complete refined products demand but also establish the refinery as a major export hub for gasoline, diesel, jet fuel, and petrochemicals across Africa and beyond.

”The expansion is expected to be implemented in phases, with key units including additional crude distillation, hydrocracking, and catalytic reforming modules.

Honeywell’s proprietary technologies are anticipated to improve yield of high-value products while reducing energy consumption and emissions.Upon completion, the 1.4 million bpd Dangote Refinery will surpass the current global top-tier facilities such as Reliance Industries’ Jamnagar Refinery (1.24 million bpd) and Paraguay’s planned 1.2 million bpd project, cementing its status as the world’s largest single-train refinery.

The project is expected to create thousands of direct and indirect jobs during the construction and commissioning phases and further reduce Nigeria’s dependence on imported refined petroleum products.

A spokesperson for Honeywell confirmed the award, saying the company was “honored to partner with Dangote on this transformative project that will reshape the African downstream landscape.

”Detailed timelines and the exact value of the contract were not disclosed, but industry analysts estimate the expansion could exceed $5–7 billion in total investment.

The statement said: Dangote Group is pleased to announce that it has entered into a strategic partnership with Honeywell International Inc to support the next phase of expansion of the Dangote Petroleum Refinery.

This collaboration will provide advanced technology and services that will enable the refinery to increase its processing capacity to 1.4 million barrels per day by 2028, marking a major milestone in our long-term vision to build the world’s largest petroleum refining complex.

Through this agreement, Honeywell will supply specialised catalysts, equipment, and process technologies that will allow the refinery to process a broader slate of crude grades efficiently and to further enhance product quality and operational reliability.

Honeywell, a global Fortune 100 industrial and technology company, offers a wide portfolio of solutions across aviation, automotive, industrial automation, and advanced materials.

Honeywell’s division UOP has been a technology partner to Dangote since 2017, providing proprietary refining systems, catalyst regeneration equipment, high performance column trays, and heat exchanger technologies that support our best-in-class operations.

Dangote Group is also advancing its petrochemical footprint. As part of the wider collaboration, we are scaling our polypropylene capacity to 2.4 million metric tons annually using Honeywell’s Oleflex technology.

Polypropylene is a key industrial material widely used across packaging, manufacturing, and automotive applications.In addition to refining expansion, Dangote Group is progressing with the next phase of its fertiliser growth plan in Nigeria. We will increase our urea production capacity from 3 million metric tons to 9 million metric tons annually.

The existing plant consists of two trains of 1.5 million metric tons each. The expansion will add four additional trains to meet growing demand for high-quality fertiliser across Africa and global markets.

Dangote Group remains fully committed to delivering world-class industrial capacity, strengthening Nigeria’s energy security, and driving sustainable economic growth through long-term investment, innovation, and strategic global partnerships.

Continue Reading

Business

What Happens if You Build on Unregistered Land in Nigeria? By Dennis Isong

In Lagos and other parts of Nigeria, registration is what gives life to land ownership. It’s like having a car without registration papers—you may drive it for a while, but if the authorities stop you, you’ll have questions to answer.

Published

on

By

82 Views

It started with Tunde, a middle-aged man who had finally saved enough to build a small bungalow for his family in Lagos. He bought land through a “family agent,” eager to start construction quickly.

Within months, the foundation was up, walls were rising, and he proudly watched his dream take shape. But one morning, government officials showed up with an order—his building was sitting on unregistered land.

Tunde’s heart sank. Everything he had worked for was suddenly at risk.Tunde’s story is not uncommon in Nigeria. Many people rush into building on land without confirming its legal status.

The result is often heartbreaking—loss of property, endless court cases, or government demolition. So, what happens if you build on unregistered land in Nigeria? Let’s break it down carefully and realistically.

1. Understanding What Unregistered Land Means

Before we talk about what happens if you build on unregistered land in Nigeria, it’s important to understand what unregistered land actually means.

In simple terms, unregistered land is land that has not been formally recorded with the government or does not have an official title document such as a Certificate of Occupancy (C of O), Governor’s Consent, or registered Deed of Assignment.

When land is registered, it means the government recognizes you as the lawful owner.

Your name and the property details are stored in official land registries, making your ownership legally protected.

But if your land is unregistered, your ownership may only be based on informal documents—like receipts, family agreements, or a local survey plan—which are not legally binding in court.

In Lagos and other parts of Nigeria, registration is what gives life to land ownership. It’s like having a car without registration papers—you may drive it for a while, but if the authorities stop you, you’ll have questions to answer.

The same principle applies to land. You may fence it, build on it, and even live there, but if your land is not legally registered, you don’t have full ownership rights.

This is why real estate experts always warn buyers to confirm land titles before paying a dime. Because in Nigeria, owning land and proving ownership are two different things.

2. The Legal Consequences of Building on Unregistered Land

Now, let’s answer the main question—what happens if you build on unregistered land in Nigeria? The legal consequences can be very serious.

When you build on unregistered land, your development is seen as being done without proper authorization.

According to the Land Use Act of 1978, all land in each state belongs to the Governor, who holds it in trust for the people.

To legally own or use any land, you must have the Governor’s approval through the Certificate of Occupancy or Governor’s Consent. Without this, your ownership is incomplete in the eyes of the law.

If government officials discover that your land is unregistered, they can issue a “stop-work” order, preventing further construction. In many cases, if the land falls under government acquisition or reserved area, the building may be marked for demolition.

And if the land belongs to another person who has legal registration, you could be charged with trespass, even if you didn’t know.

Imagine spending millions building your dream house only to be told that it stands on land that belongs to someone else—or worse, on land the government has already allocated for a public project.

In such cases, ignorance is not an excuse. The law prioritizes the registered owner.Another hidden danger is that you can’t use unregistered land for financial transactions.

For example, banks will never accept such property as collateral for a loan because it lacks a valid title.

Even selling it later becomes difficult since buyers now demand proper documentation before parting with money.

So, while you may enjoy the land temporarily, the long-term risk is too great. Building on unregistered land in Nigeria can cost you not just your investment but also your peace of mind.

3. The Financial and Emotional Cost of Building Without Proper Registration

There is a painful truth many Nigerians have learned the hard way—building on unregistered land might seem cheaper at first, but in the long run, it is far more expensive.Let’s go back to Tunde’s story.

After the authorities stopped his construction, he tried to regularize his documents.

He soon discovered that the land was under government acquisition, meaning it was never meant for private use.

To reclaim it, he had to go through an expensive and uncertain process called ratification.

That process involved multiple visits to government offices, lawyers’ fees, and months of waiting—with no guarantee of success.

Even if you’re lucky enough that the land can be ratified, the total cost of perfecting the title after building is usually higher than if you had done it before construction.

You might need to pay for survey plans, excision, governor’s consent, and other documentation. Each stage involves money, time, and patience.

Financially, you could also lose everything.

If a legitimate owner appears with registered documents, you’ll have no legal claim to the land.

Nigerian courts rely heavily on documentary evidence, not just physical possession.

So even if you’ve built a house and lived there for years, the registered owner can claim it and even obtain an order to demolish your structure.

Beyond money, there’s the emotional toll. Many families have experienced sleepless nights, endless anxiety, and strained relationships because of land issues.

You can’t enjoy your property when you’re constantly worried about losing it. And in some communities, land disputes can turn violent.

So, the next time someone offers you “cheap land,” pause and ask yourself: Is it registered? Because what looks like a bargain today might become your biggest loss tomorrow.

4. How to Avoid the Trap of Building on Unregistered Land

If you truly want to avoid the painful consequences of building on unregistered land in Nigeria, you must follow due process before laying a single block.The first step is verification.

Always confirm the status of the land with the Ministry of Lands or relevant authorities in the state.

In Lagos, for example, you can conduct a land search at the Alausa Land Registry. This search will show whether the land has a valid title, is under acquisition, or has any disputes.

Second, work with professionals. Engage a registered surveyor, a real estate lawyer, or a trusted realtor who understands the terrain.

They can help you verify documents, identify red flags, and guide you through the legal requirements.Third, insist on seeing original documents before paying for any land. Don’t rely on photocopies or word-of-mouth assurances.

If your land is not under government acquisition, you can apply for ratification or regularization.

This process involves the state government officially approving your ownership and issuing a title document.

Check for the C of O, Deed of Assignment, or Governor’s Consent. And if the land is family-owned, make sure you deal directly with recognized family heads, not self-appointed agents.

Fourth, once you buy the land, register it immediately. Many people delay registration because they want to “build first and register later.”

This is risky.

Once you start construction, you expose yourself to legal issues. Registering your land protects your ownership and gives you the confidence to develop it freely.

Last, remember that due diligence is cheaper than regret. Spending a few weeks verifying land is better than losing years of hard work.

5. What You Should Do If You’ve Already Built on Unregistered Land

Let’s be realistic—many people reading this might already be living on unregistered land.

The good news is that all hope is not lost. There are legal steps you can take to regularize your property, although it depends on the specific situation.

If your land is not under government acquisition, you can apply for ratification or regularization. This process involves the state government officially approving your ownership and issuing a title document.

You’ll need to submit your survey plan, proof of purchase, and other documents. It can take time, but once completed, your land becomes legally recognized.

However, if your land is within a government-acquired area or marked for public use, things get complicated. In such cases, the government may reclaim it without compensation.

But sometimes, depending on the policy and nature of the land, you may be able to apply for excision, which means the government releases a portion of the acquired land for private ownership.

Another option is negotiation. If the land belongs to a private owner with proper documents, you can reach an agreement and purchase the land officially through a fresh Deed of Assignment. It might be costly, but it’s better than losing your investment entirely.

The key is not to ignore the situation. Visit the Ministry of Lands, talk to a property lawyer, and start the regularization process.

The earlier you act, the higher your chances of securing your property legally.Building on unregistered land in Nigeria may seem like an innocent mistake, but the consequences can be devastating.

You risk losing your property, facing legal battles, or spending double the cost trying to fix documentation problems.

The question—What happens if you build on unregistered land in Nigeria?—should not just be a curiosity; it should be a serious warning to every property owner or investor.

Real estate in Nigeria is one of the most profitable investments, but only when done correctly.

Always prioritize legal ownership over quick development. Verify, register, and secure your documents before building.

It’s the only way to truly own your land without fear or uncertainty.So, learn from Tunde’s story. Don’t rush the process.

A dream home built on shaky legal ground can easily become a nightmare. But with proper guidance, patience, and professional help, you can own property in Nigeria safely and confidently.

Dennis Isong is a TOP REALTOR IN LAGOS.

He Helps Nigerians in Diaspora to Own Property In Lagos Nigeria STRESS-FREE. For Questions WhatsApp/Call +2348164741041

Continue Reading

Trending