Nigeria's Power Sector Debt May Hit N17.1 Trillion by 2033, Gencos Warn

Nigeria's electricity Generation Companies (Gencos) have issued a stark warning: the nation's power sector debt could surge to approximately N17.11 trillion by 2033. This projection hinges on the continued failure to address the fundamental causes of the market's ongoing financial crisis, despite the federal government's debt reduction program.

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the country’s power sector debt could balloon to about N17.11 trillion by 2033 despite the federal government’s ongoing Presidential Power Sector Debt Reduction Programme (PPSDRP), unless the structural causes of the market’s financial crisis are urgently addressed.

The Association of Power Generation Companies (APGC) released an analysis highlighting that the government's bond program, while a significant intervention, only addresses a portion of the mounting liabilities within the Nigerian Electricity Supply Industry (NESI). As of June 2026, the estimated debt owed to Gencos had already reached about N7.66 trillion. Even with planned bond issuances, a substantial amount of outstanding obligations would remain uncovered.

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while the government’s bond programme is a significant intervention, it addresses only a fraction of the mounting liabilities in the Nigerian Electricity Supply Industry (NESI).

A critical issue identified is the persistent monthly shortfall in payments for electricity supplied to the national grid. Data from January to April 2026 reveals that Gencos invoiced an average of N213.5 billion monthly but received only around N90.8 billion, a settlement rate of just 42.52 percent. This consistent payment gap of approximately N122.7 billion per month is fueling the accumulation of new debts.

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Gencos invoiced an average of N213.5 billion monthly but received only about N90.8 billion, translating to an average settlement rate of 42.52 per cent.

The APGC projects that if this trend continues, the industry's total debt will escalate dramatically from N8.27 trillion in 2026 to N17.11 trillion by 2033. The association stresses the urgent need for either cost-reflective tariffs or funded subsidies to rectify the market's financial instability and prevent further debt accumulation.

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unless this payment gap is eliminated, new debts will continue accumulating at a pace that could overwhelm the current debt resolution programme.