Power crisis deepens as FG’s N4trn debt strangles electricity sector

The lights flicker, and sometimes they don’t come back on, a reality millions of Nigerians know all too well. But behind this frustrating inconsistency lies a staggering financial crisis.

The Federal Government owes electricity generation and distribution companies more than N4 trillion in subsidies; a debt that’s crippling the nation’s power sector.

This revelation came from the Minister of Power, Adebayo Adelabu, during the public presentation of the National Integrated Electricity Policy and Nigeria Integrated Resource Plan on Thursday in Abuja. His tone was one of urgency and frustration.

“How do you expect the GenCos to perform optimally? How do you expect them to pay for gas, service their turbines, maintain infrastructure, and pay their staff when they’re owed over N4 trillion?” Adelabu asked.

Breaking down the figures, he explained that:

• N2 trillion is legacy debt owed to Generation Companies (GenCos)
• N1.9 trillion is unpaid electricity subsidy for 2024 owed to GenCos
• N450 billion is owed to Distribution Companies (DisCos) for 2024 subsidies

These mounting debts, he said, have pushed the entire sector to the brink. Without the funds to maintain their systems, pay workers, or invest in infrastructure, the GenCos and DisCos remain unable to deliver consistent electricity to homes and businesses across Nigeria.

“I don’t deceive myself,” the minister admitted. “The government cannot afford to continue funding subsidies at this level because electricity consumption is rising. We need a sustainable solution.”

But while the subsidy model falters, so does investment in the power infrastructure. Adelabu criticized the DisCos for their failure to upgrade distribution networks, which has delayed the expected migration of more customers to Band A: a category meant to receive the most reliable power supply.

Despite the bleak outlook, Adelabu hinted at reforms. “We’ll look at the tariffs again not necessarily to increase them but to improve on last year’s modest achievements.” He also revealed plans to develop a new intervention model targeting the population segments most in need of subsidized power.

For now, though, the reality remains stark: with N4 trillion in unpaid debt and a system running on empty, Nigeria’s power sector hangs in a delicate balance and every flicker of light reminds citizens just how fragile it is.

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