The Senate Committee on Power has raised the alarm over a deepening liquidity crisis in Nigeria’s power sector, revealing that the Federal Government owes electricity generation companies (GenCos) approximately ₦800 billion so far in 2025.
Chairman of the committee, Senator Enyinnaya Abaribe, made the disclosure on Saturday while addressing journalists during a power sector retreat organized by the Nigerian Electricity Regulatory Commission (NERC) in Ikot-Ekpene, Akwa Ibom State.
According to Abaribe, the debt stems from monthly tariff shortfalls, which amount to an estimated ₦200 billion each month. Alarmingly, he stated that no payments have been made to GenCos since the beginning of the year, compounding an existing debt profile of over ₦3 trillion.
“There’s a liquidity crisis in the power sector,” Abaribe said. “The generating companies are owed so much, and so are the distribution companies. The government is currently defaulting on ₦200 billion monthly payments. For 2025, that means ₦800 billion already owed. This is in addition to the historical debt of over ₦3 trillion.”
Gas Supply at Risk as Arrears Mount
Abaribe also warned that the ripple effect of the government’s default is threatening the entire energy supply chain. He noted that GenCos owe gas suppliers, who may soon be unable to sustain gas deliveries if payments remain stalled.
“Gas suppliers cannot continue supplying gas indefinitely without being paid,” he added, raising fears of a potential breakdown in electricity generation.
Urgent Policy Choices Ahead
Despite the grim figures, Abaribe expressed cautious optimism, calling on the Federal and State Governments to collaborate on decisive solutions to the ongoing crisis. He pointed to the need for a unified approach under Nigeria’s evolving two-tier electricity market, where both federal and state authorities now play active roles.
“A tough decision must be made who pays for electricity? Should the government subsidize it like we did with fuel? That’s the choice before us,” he said.
Adelabu Blames Vandalism, Funding Gaps
In his remarks, Minister of Power, Adebayo Adelabu, acknowledged the sector’s challenges but highlighted some reforms by the Tinubu administration, including modest improvements in generation capacity.
However, Adelabu lamented rampant vandalism of energy infrastructure, describing it as a uniquely Nigerian problem. He also pointed to a persistent lack of funding as a major obstacle to sectoral stability.
“Nowhere else do we see energy infrastructure vandalized at this level. It’s a major setback to reform,” the minister said.
States Say Stable Power Is Key to Economic Growth
Akwa Ibom State Governor, Umo Eno, represented by Deputy Governor Akon Eyakenyi, emphasized the economic implications of Nigeria’s power crisis. He underscored the role of Small and Medium Enterprises (SMEs) in driving national growth and stressed that stable electricity is essential to unlock their full potential.
“No economy thrives without steady power. SMEs are the backbone of development. If we solve the power crisis, we energize the economy,” Eyakenyi stated.
The NERC-organized retreat brought together lawmakers, regulators, and key players in the energy sector to deliberate on urgent reforms and explore practical pathways to financial and operational stability.
