₦airaland Forum

Power generation companies under the umbrella of the Association of Power Generation Companies have disclosed that outstanding unpaid invoices for electricity generated and supplied to the national grid have surged to about N6tn, raising fresh concerns over the sustainability of power supply in Nigeria.

The group said the growing debt burden, driven by revenue shortfalls and weak remittances across the electricity value chain, has significantly strained the financial capacity of generation companies to invest in maintenance, fuel procurement, and expansion.

The power generation companies also strongly rejected allegations by the Nigeria Labour Congress that electricity firms were engaged in “institutionalised extortion,” insisting that the claims misrepresent the deep-rooted liquidity crisis threatening the country’s power sector.

The Chief Executive Officer of the association, Joy Ogaji, made the announcement in a statement on Wednesday in reaction to recent comments by the Nigerian Labour Congress. Ogaji accused labour of peddling a “simplistic and inflammatory narrative” that ignored the structural challenges facing the industry.

She said, “While we acknowledge the frustrations of Nigerians regarding the unstable power supply, we must firmly reject the NLC’s characterisation of the sector’s challenges. To label the legitimate operations of power firms as robbery and a grand deception is a misrepresentation of the facts and a disservice to the ongoing efforts to stabilise Nigeria’s electricity supply industry.”

The GenCos said the remarks by labour, including allegations of phantom subsidy and institutional extortion, undermined ongoing efforts by stakeholders to resolve the liquidity crisis and ensure a stable electricity supply.

The association said the GenCos, consisting of over 20 member companies, were in fact the most exposed players in the electricity value chain, with outstanding unpaid invoices now exceeding N6tn.

According to the association, “The truth is that the power sector, over a decade after privatisation, remains hamstrung by severe liquidity challenges. It is a fact that GenCos, who are entitled to about 60 per cent of the market receivables following their invoiced energy bills, face the greatest risk in the electricity value chain, with outstanding unpaid invoices now over six trillion (N6tn) naira.”

The power firms insisted that they were open to scrutiny, stressing that their financial records could be subjected to a forensic audit if necessary. “If the NLC and any other institution find it necessary, let it be known that GenCo books are ready for any forensic examination. But the facts must be established and the real causes of the sector’s challenges identified,” the statement added.

The association also dismissed insinuations that government support for the sector was a covert political arrangement ahead of elections, describing such claims as “baseless and offensive to professionals working tirelessly in the industry.” It further warned that persistent misrepresentation of the sector’s financial realities could discourage investment and worsen power shortages.

“We also strongly refute the insinuation that proposed government support for the sector is a clandestine plan to settle the boys ahead of elections. Such claims undermine the critical liquidity interventions needed to keep the lights on.

“GenCos deserve pity and not castigation, ridicule, and victimisation. Trying to smear their image with such baseless and unfounded allegations is not only unfair but misleading to the Nigerian populace, giving the impression that the sector is not regulated and that electricity market participants can do as they please unchecked,” the association said.

The GenCos urged labour to engage constructively with industry stakeholders rather than escalate tensions, noting that the sector required coordinated reforms to address longstanding structural weaknesses.

The latest row follows recent comments by the President of the Nigeria Labour Congress, Joe Ajaero, who accused electricity firms of exploiting Nigerians through tariff adjustments and alleged hidden subsidies. The labour union had also threatened industrial action, raising fresh concerns over the stability of the country’s fragile power sector.

He said: “The liquidity crisis will continue unless the government finally does what it needs to do, which is to allow tariffs to be market reflective. But at the end of the day, we will see more debts build up because the political campaigns will start, so people will want energy.

“I don’t see the government allowing tariffs to become market reflective. So we are going to see a lot of liability in this sector as well. All the same, it is expected that we will move forward slightly. I don’t see a very huge leap in the sector, but at least, there will be progress.”

When reminded of the N500 billion bond the government recently issued to clear the legacy debts, Omonfoman faulted the government for fixated on settling old debts while allowing the cause (non cost-reflective tariff) to continue hurting the market.

nairalanda1:
That's what I tell people.

Nigerians, rich and poor, and even the government, are not paying their electricity bills, and the result is a sector hamstrung by liquidity challenges. The subsidy and price controls make matters worse.

That means that discos cannot raise enough money to pay gencos. DIscos have to even reject power from the gencos because they know that people not paying means that no money to pay the gencos.

But most people na to deny, deny, deny. Some even misunderstand what privatization means. Yes, it means people invest, but it also means that customers have to pay the kind of cost reflective tarrifs that would make the investment make sense. Not this one where only 20% of people pay cost reflective tarrifs (and there is no way that revenue from the 20% who do pay can subsidsze the rest...).

A business must make a profit to survive. If you call someone tinubu supporter for saying that, that means you are saying that tinubu government get common sense, which as we know na oxymoron. And anyway, tinubu is keeping the price controls on the sector that are contributing to the problem.

nedu666:
because those bills are inflated. Let them give prepaid to everyone, you will see incident of unpaid bills reduce

nairalanda1:
That's what I tell people.

Nigerians, rich and poor, and even the government, are not paying their electricity bills, and the result is a sector hamstrung by liquidity challenges. The subsidy and price controls make matters worse.

That means that discos cannot raise enough money to pay gencos. DIscos have to even reject power from the gencos because they know that people not paying means that no money to pay the gencos.

But most people na to deny, deny, deny. Some even misunderstand what privatization means. Yes, it means people invest, but it also means that customers have to pay the kind of cost reflective tarrifs that would make the investment make sense. Not this one where only 20% of people pay cost reflective tarrifs (and there is no way that revenue from the 20% who do pay can subsidsze the rest...).

A business must make a profit to survive. If you call someone tinubu supporter for saying that, that means you are saying that tinubu government get common sense, which as we know na oxymoron. And anyway, tinubu is keeping the price controls on the sector that are contributing to the problem.

Standing5:
You always think you know more than everyone.

If nigerians have the habit of not paying for power consumed, why hasnt the Gencos, Discos and NERC bannished postpaid system thats leaving that loophole?
They are the ones that will even frustrate clients.

Imagine it was GSM and we used a postpaid system where people dont like paying after using, what is MTN and Airtel suppose to do if there is a prepaid option? Are they suppose to be permitting delay of prepaid system deployment?

You arguements on issues remain perpetually dull since the days of subsidywise and backbencher.

nairalanda1:
Well, expressing one's opinon doesn't mean I think I know more than everyone, sonny.



It seems you don't know that you can be on prepaid and at the same time, still refuse to pay or underpay. Also, most prepaid consumers are subsidsied and yes, government doesn't pay up the subsides.

And then there is the concept of bypassing the meter, which happeneth.



The GSM where everyone pays a cost reflective tarrifs? Also, GSM is different from power, you can't use a phone to make calls or send text or use the internet until you put some money into it, at a price the company sets.

Power sector...you can bypass the meters and at the same time, also chase away disco workers who come to enforce payment, or even just plain refuse to pay, and even reconnect after bribery, sometimes never even need to pay a bribe, and nothing would happen.





Oh?

Standing5:
Very dull response.

nairalanda1:
Well, expressing one's opinon doesn't mean I think I know more than everyone, sonny.



It seems you don't know that you can be on prepaid and at the same time, still refuse to pay or underpay. Also, most prepaid consumers are subsidsied and yes, government doesn't pay up the subsides.

And then there is the concept of bypassing the meter, which happeneth.



The GSM where everyone pays a cost reflective tarrifs? Also, GSM is different from power, you can't use a phone to make calls or send text or use the internet until you put some money into it, at a price the company sets.

Power sector...you can bypass the meters and at the same time, also chase away disco workers who come to enforce payment, or even just plain refuse to pay, and even reconnect after bribery, sometimes never even need to pay a bribe, and nothing would happen.





Oh?

nairalanda1:
Cold reason for possible inflation of the bills? Most people are not paying or are not paying enough. So, bills are inflated for consumers who do pay.

(Also, the 'inflated bills' commentary is code for 'electric power should be free of charge'. Let's not lie).

Metering does not solve the billing problem. As at last year, 68% of metered consumers bypass their meters.

nairalanda1:
That's what I tell people.

Nigerians, rich and poor, and even the government, are not paying their electricity bills, and the result is a sector hamstrung by liquidity challenges. The subsidy and price controls make matters worse.

That means that discos cannot raise enough money to pay gencos. DIscos have to even reject power from the gencos because they know that people not paying means that no money to pay the gencos.

But most people na to deny, deny, deny. Some even misunderstand what privatization means. Yes, it means people invest, but it also means that customers have to pay the kind of cost reflective tarrifs that would make the investment make sense. Not this one where only 20% of people pay cost reflective tarrifs (and there is no way that revenue from the 20% who do pay can subsidsze the rest...).

A business must make a profit to survive. If you call someone tinubu supporter for saying that, that means you are saying that tinubu government get common sense, which as we know na oxymoron. And anyway, tinubu is keeping the price controls on the sector that are contributing to the problem.

nairalanda1:
Okay, enjoy what you paid for then.

Krak:
A house somewhere in Southwest Nigeria in an area barely having up to 25 hours of combined electricity monthly. IBDC was always bringing a flat rate of at least 15k bill monthly.

When we got a prepaid metre for the same house, we were consuming less than 1k monthly in electricity bills.

The truth is that this figure that the Discos, not Gencos, claim that their customers are owing them are highly and grossly inflated.

nairalanda1:
That's what I tell people.

Nigerians, rich and poor, and even the government, are not paying their electricity bills, and the result is a sector hamstrung by liquidity challenges. The subsidy and price controls make matters worse.

That means that discos cannot raise enough money to pay gencos. DIscos have to even reject power from the gencos because they know that people not paying means that no money to pay the gencos.

But most people na to deny, deny, deny. Some even misunderstand what privatization means. Yes, it means people invest, but it also means that customers have to pay the kind of cost reflective tarrifs that would make the investment make sense. Not this one where only 20% of people pay cost reflective tarrifs (and there is no way that revenue from the 20% who do pay can subsidsze the rest...).

A business must make a profit to survive. If you call someone tinubu supporter for saying that, that means you are saying that tinubu government get common sense, which as we know na oxymoron. And anyway, tinubu is keeping the price controls on the sector that are contributing to the problem.

MrPOTUS:
@ nairalanda1

What will you say about this?

Starcrest1:
You always talk like Nigeria is a working country, you can't apply the idea of bloated cost and payment which the western world is using in Nigeria.
Western world has bloated wages and bloated cost of living which will even out in cost and expenditure.

You can't come to Nigeria which has poor Income and be looking for bloated payments, you are just going to go bankrupt ask DSTV what happened to them.

So calm down with all these your increase tax and increase tariffs you are shouting, different systems work in different ways and Nigeria needs to do what will work for them.

netmillionaires:
In my area there is no way you can bypass the meter. Meyer's are sited on electric poll. So you can clearly see the connection.

MrPOTUS:
Baba, your arguments are shitty

Give everyone prepaid and the problem is more than half solved.

And for those bypassing, it's the job of the distribution companies to melt stiffer punishment on them.

You're just making excuses and beating around the bush with your statement every time

Everyone should pay before consuming and those bypassing should be jailed or totally disconnected from power for a given number of months. People go sit up.