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Electricity: GenCos Threaten National Shutdown Over FG’s N4 Trillion Debt

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Power Generation Companies (GenCos) warned on Monday of an imminent shutdown due to an N4 trillion debt owed by the Nigerian government for electricity generated and supplied to the national grid.

A statement on Monday, signed by Sani Bello, Chairman of the Board of Trustees of the Association of Power Generation Companies, said the debt, which includes N2 trillion for 2024 and N1.9 trillion in legacy debts, is threatening the continued operation of their power generation plants.

In February, the Minister of Power, Adebayo Adelabu, said the Nigerian government owes electricity generation companies (GenCos) and distribution companies (DisCos) in the country over N4 trillion in debt.

Mr Adelabu added that the debt burden is crippling the sector, making it challenging for GenCos to perform optimally.

GenCos said 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 its ability to continue to perform their obligations, thereby threatening to completely undermine the Electricity value chain.

The firms added that their 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 (DLIs) enshrined in the Power Sector Recovery Program (PSRP).

Mr Bello said access to forex is another problem, adding that given that major operation and maintenance needs in the generation sub-sector are dollarised, the importance of a specialised window or stable dollar allocation option for the GenCos cannot be overemphasised.

“GenCos is of the position that there is a need for a coordinated approach by all stakeholders in the Nigerian Electric Supply Industry (NESI) to address the liquidity issue realistically and sustainably in the power sector so that Nigerians can have access to reliable electricity supply.”

In light of the severity of the issues highlighted, he said the GenCos are requesting that immediate and expedited action is 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. 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,” Mr Bello said.

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

“The power generated by GenCos have 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, 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,” he said.

He explained that GenCos liquidity challenges are further worsened by the various policies introduced such as the payment waterfall in the NESI, which deprioritises payment to GenCos as service providers.

As a result of this, he said no one is under pressure to ensure GenCos invoices are fully settled.

“The implication of this is that GenCos only get paid a portion of their invoices (9 per cent, 11 per cent) from whatever amount is left.

“This is an aberration as it is a clear departure from existing terms of the Power Purchase Agreement (PPA) guiding the contractual relationship between GenCos and the Nigeria Bulk Electricity Trading Plc (NBET), by which NBET as buyer has contracted to purchase the available capacity as agreed under the PPA.”

He added that GenCos should be accorded the utmost priority when it comes to payment to enable them to have the capacity to continue to produce the electricity which is the product around which the entire power value chain is built.

“On the foregoing, we hereby demand the following to urgently put GenCos in a position to continue generating power for transmission and distribution to Nigerians: Immediate implementation of payment plans to settle all outstanding GenCos invoices. Reprioritisation of payments under the waterfall arrangement to give full priority to a hundred percent payment of GenCos’ invoices as at when due.

“A clear financing plan to backstop the exposures in the NERC’s Supplementary Order to the MYTO and the DRO 2024. Provision of payment security (guarantees) backed by World Bank/AFDB to guarantee full payment to GenCos, to enable them to meet their critical needs, improve generation to Nigeria and implement their respective growth and expansion plans,” he said.

BIG STORY

JUST IN: Atiku, Obi, El-Rufai, Opposition Coalition Leaders Arrive For ADC Unveiling

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Leaders from different opposition parties are converging at the Yar’Adua Centre in Abuja for a press briefing organised by the African Democratic Congress (ADC).

Those already present include former Vice-President Atiku Abubakar; Peter Obi, the 2023 presidential candidate of the Labour Party (LP); Nasir el-Rufai, former Kaduna governor; and Dino Melaye, a former senator.

Also in attendance are Solomon Dalung, former minister of youth and sports; media figure Dele Momodu; ex-senator Gabriel Suswam; and Ireti Kingibe, a current LP senator.

Others present include Rotimi Amaechi, ex-governor of Rivers; and Emeka Ihedioha, former deputy speaker of the house of representatives.

The event has drawn participation from members of the Peoples Democratic Party (PDP), the Social Democratic Party (SDP), and the LP.

Former Senate President David Mark led other coalition members into the hall as the programme began.

Also in attendance are Rauf Aregbesola, former Osun governor and interim national chairman of the ADC; and Aminu Tambuwal, ex-governor of Sokoto.

Earlier in the day, the ADC coalition unveiling faced a disruption after the original venue cancelled the booking at the last minute.

The event was initially planned for the Wells Carlton Hotel and Apartments in Asokoro, Abuja.

Just hours before the scheduled time, organisers were notified that the hotel would not proceed with hosting the event.

A screenshot of the hotel’s notice, shared by Momodu on Instagram, cited an “internal compliance matter” as the reason for the cancellation.

Following the development, the coalition secured the Yar’Adua Centre as an alternative venue.

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BIG STORY

I’m Not In Any Coalition, Still A Labour Party Member — Abia Governor Alex Otti [VIDEO]

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Abia State Governor, Alex Otti, has reaffirmed his commitment to the Labour Party, stating that he is not part of any coalition and has neither attended nor been invited to any meeting organised by such groups.

During an interactive session with members of the Abia State Global Economic Council in Umuahia, Otti emphasised that he is focused on fulfilling the responsibilities entrusted to him by the people of Abia and is not seeking to join another party.

Addressing the issue of a reported crisis within the Labour Party, Otti acknowledged that the party had faced challenges, which were resolved through the Supreme Court.

 

Watch video below:

Video credit: Channels TV

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BIG STORY

JUST IN: Rauf Aregbesola Agrees To Serve As ADC Interim Secretary

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Former Osun State Governor Rauf Aregbesola has accepted the role of Interim National Secretary of the African Democratic Congress (ADC).

Aregbesola explained that his decision stems from concerns that most political parties in Nigeria operate without clear ideological direction.

In a statement shared on his verified Facebook page, he criticized existing political parties, describing them as hollow entities that unite and split based not on values or policies, but on the pursuit of power and personal interests.

He said: “ACCEPTANCE SPEECH BY OGBENI RAUF AREGBESOLA ON HIS APPOINTMENT AS THE INTERIM NATIONAL SECRETARY, ADC – The party platform adopted by the National Opposition Coalition Group – Tuesday, 1st July, 2025

“Dear Party Leaders, Distinguished Members, Friends, and Fellow Citizens,

“It is with deep humility, a profound sense of duty, and unwavering hope for our people, nation, race and party and that I accept the appointment as The National Secretary of our great party.

“I thank the leadership for the trust reposed in me. But more than that, I thank every committed member of this party and those who still believe that politics can be a force for good; people who believe that parties form government and must control it; those who believe in the supremacy of the party in a democracy and all products of democratic contests; those who recognise that parties must stand for and with the people in the promotion of their interests and aspirations; that parties therefore are not merely machines for winning elections but institutions for mobilizing, organizing, energizing, educating, empowering and encouraging the people towards their emancipation and development.

“Let me begin by saying this: a political party is not a platform for opportunism. It is not a mere vehicle to power for the few, nor a tool for personal ambition. A political party, in its truest form, is a living institution built on values, guided by ideals and accountable to the people it seeks to serve.

“Throughout Africa’s history and particularly in the legacy of the African National Congress (ANC) of South Africa, a 113-year behemoth of party organization that is impeccable in its credibility as a model of supremacy of party over its creation (government and popularly elected officials) have seen what a party grounded in ideology, principle, and people-centered struggle can achieve.

The ANC is not perfect, but it stands for something. It was forged in resistance, sharpened by vision, and led by men and women who believe in justice, dignity, equality, inclusivity of all interests and true freedom. It has character. It has soul. It is therefore a true platform for the expression of their aspirations.

“Sadly, in Nigeria today, we cannot say the same about many of our political parties. Our political landscape is plagued by parties that lack ideological depth. They are empty shells merging and splitting, not over policy or principle, but over power and personality. There is little regard for the people, and even less for the country.

“That is not the kind of party we must be. That is not the kind of party I will serve. As The National Secretary, I will work to build a party that has a clear ideological compass, a party that is absolutely committed to the people, rooted in democratic values, rule of law, social justice, accountability, transparency and national development. A party that listens and works for to the people, not only during elections, but every single day.

“We must become an institution where:

(1) Internal democracy is not just preached but practiced.

(2) Intra-party competition is transparent, fair, and just.

(3) All party structures from the ward to the national level and function effectively and efficiently.

(4) Young people, women, and the marginalized have a real voice, not symbolic inclusion.

(5) All special and critical interests (security, educators, farmers, workers, women, youth, professionals, people with special needs, etc. must be recognised and allowed to have autonomous structures within the party.

“We will model international best practices in party organization, administration, and ethics. We will study what works, from South Africa to Sweden, from Chile to Kenya and adapt to them into what fits our local reality. Discipline, order, clarity of purpose, and service to the people must define us.

“We must be the party that talks about public education and actually builds schools. That speaks of security and supports real policies to keep our communities safe. That believes in jobs and works to create them. That stands for Nigeria not just during elections, but in everyday governance.

“This is not an easy task. It will take time. It will demand sacrifice. But it can be done.

“I ask for your support not just in words, but in action. Hold me accountable. Challenge me when I stray. And stand with me as we begin this journey to rebuild our party, restore its soul, and return politics to its rightful place – as a service to the people. Thank you, and may our work ahead be worthy of the hopes our people place in us.”

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