Nigeria’s electricity generation companies have warned that the Federal Government’s ₦4 trillion Presidential Power Sector Debt Reduction Programme may do little to resolve the industry’s deepening financial crisis, saying fresh debts of more than ₦7 trillion could pile up before the programme is fully implemented.
Speaking on behalf of power producers, the Chief Executive Officer of the Association of Power Generation Companies (APGC), Joy Ogaji, said the companies were not opposed to the government’s plan to raise bonds to clear legacy debts.
However, she argued that the initiative addresses only old liabilities while new debts continue to grow every month.
Her comments followed the Federal Government’s announcement that it will issue a second bond worth about ₦729 billion under the Presidential Power Sector Debt Reduction Programme to settle verified debts owed to electricity generation companies.
The latest issuance comes after a ₦501 billion bond floated in January 2026, bringing the value of the first two bond tranches to about ₦1.23 trillion. According to the Nigerian Bulk Electricity Trading Plc (NBET), the bonds represent the first phase of a broader ₦4 trillion programme approved by President Bola Tinubu to clear legacy obligations in the electricity sector.
Ogaji questioned the transparency of the first bond disbursement, asking the government to disclose who received payments and how much each beneficiary collected.
She argued that while the bond programme covers debts accumulated up to December 2024, liabilities from 2025 and 2026 are still rising because electricity distribution companies and NBET continue to fall short of full monthly payments to generation companies.
According to her, by the time the government completes the seven-year repayment plan, fresh debts could exceed ₦7 trillion, leaving the industry trapped in another cycle of unpaid obligations.
Ogaji insisted that the power sector needs a sustainable financing model rather than periodic debt settlements.
She also challenged the Federal Government’s electricity subsidy policy, arguing that the subsidy exists largely on paper because there is no dedicated budgetary allocation to support it.
Instead of maintaining blanket subsidies, she urged the government to define exactly how much electricity it can realistically subsidise, make adequate budgetary provisions for it, and allow the market to operate efficiently beyond that level.
According to the GenCos, without comprehensive reforms to improve market liquidity and ensure timely payments across the electricity value chain, new debts will continue to accumulate, undermining efforts to restore financial stability in Nigeria’s power sector.
