Nigeria Power Debt Hits N6.6trn, N501bn Bond Inadequate

The Chief Executive Officer of the Association of Power Generation Companies (GENCOs), Dr. Joy Ogaji, has stated that the Federal Government’s N501 billion power sector bond is insufficient to address the escalating legacy debt owed to electricity generating companies, warning of severe risks to Nigeria’s power supply.

Speaking on Arise Television, Ogaji disclosed that the sector’s legacy debt has grown from N4 trillion in December 2024 to over N6 trillion currently. She projected the figure could reach approximately N6.6 trillion by the end of February 2026, citing a consistent monthly increase of about N200 billion.

“As of December 2024, it was N4 trillion. If you calculate N200 billion times 12, you know the figure for 2025. And now we are currently in February. So currently it’s above N6 trillion. We’re looking at about N6.6 trillion by the end of this month,” Ogaji explained.

This mounting indebtedness exacerbates chronic liquidity issues within the power sector. Ogaji emphasized that the N501 billion bond, which was fully subscribed in January 2026, falls dramatically short of settling the debt. She noted that President Bola Ahmed Tinubu had initially pledged to clear the N4 trillion liability, a commitment that was later scaled back to the significantly smaller bond amount.

The GENCOs’ warning underscores a persisting crisis despite the privatization of generation and distribution. Nigeria’s installed capacity stands at about 15,000 megawatts, but actual generation frequently hovers between 2,000 and 4,000 megawatts, leaving millions with unstable supply.

Ogaji urged the government to implement a permanent, practical, and sustainable solution to clear the legacy debt, stating that without urgent action, the financial strain could push the power sector toward total collapse and deepen the national electricity crisis. The situation highlights a fundamental mismatch between the government’s financial interventions and the scale of obligations within Nigeria’s power value chain.