The Nigerian Senate Committee on Power has cried out over the growing financial crisis facing the country’s power sector, revealing that the Federal Government currently owes electricity generating companies (GenCos) about N800 billion for this year alone. The lawmakers warned that if nothing is done urgently, the sector might collapse due to lack of funds.
Chairman of the Committee, Senator Enyinnaya Abaribe, raised the alarm while speaking with journalists during a three-day retreat held in Ikot-Ekpene, Akwa Ibom State. The event, which was organised by the Nigerian Electricity Regulatory Commission (NERC), brought together key stakeholders in the power sector to brainstorm on how to solve the problems in the industry.
Senator Abaribe disclosed that the Federal Government has not paid any money to the power producers since the beginning of 2025. He explained that the monthly tariff shortfalls now amount to about N200 billion, and that no payment has been made so far this year, adding up to N800 billion. He said the fresh debt comes on top of an already existing debt of over N3 trillion owed to the GenCos.
According to him, the situation has caused serious strain on the companies responsible for generating power in Nigeria, many of whom also owe gas suppliers. Without gas, he noted, there can be no electricity generation.
“There is a serious liquidity crisis in the power sector,” Abaribe said. “The generating companies are owed a lot of money. The distribution companies (DisCos) are also struggling because they are not getting full payments. The gas suppliers are not being paid by the GenCos, and they cannot continue to supply gas without payment.”
He further explained that the government must make a firm decision on how to move the sector forward. He said both the federal and state governments now have roles to play, especially with the recent reforms that allow states to participate in electricity generation and distribution.
“The question we must all ask is: who will pay for electricity? Do we continue to subsidise electricity or allow people to pay the full cost? In other parts of the world, this decision is made clearly. In Nigeria, we must now decide,” Abaribe said.
Also speaking at the retreat, the Minister of Power, Chief Adebayo Adelabu, gave an overview of the challenges and progress in the sector. He praised the efforts of President Bola Ahmed Tinubu’s administration, saying there has been some improvement in generation capacity. However, he lamented that several issues, including lack of funds and rampant vandalism of power equipment, continue to hamper progress.
“Only in Nigeria do you see this level of destruction of energy facilities,” Adelabu said. “We are trying our best to fix the system, but we need support from all levels of government and the public.”
On his part, the Governor of Akwa Ibom State, Pastor Umo Eno, who was represented by his deputy, Senator Akon Eyakenyi, spoke on the importance of steady electricity supply in supporting Small and Medium Enterprises (SMEs). He noted that SMEs are the engine of economic development in many countries, and without constant power, they cannot thrive.
Eyakenyi expressed optimism that the retreat would yield practical solutions to the many problems troubling the Nigerian power industry. She called on stakeholders to put aside political differences and focus on fixing the power sector for the benefit of all Nigerians.
The retreat ended with a renewed call for collaboration among government agencies, private investors, and regulators to rescue the sector from total collapse. While no concrete decisions were announced, many participants agreed that bold action must be taken immediately to stop the bleeding in the power industry.
