By Chidi Ugwu
Association of Power Generation Companies on Monday raised the alarm over unpaid invoices to the Nigerian power generation companies (GenCos) to the tune of over ₦4 trillion, including legacy debts and 2024 arrears, with payment rates dropping below 30%.
A statement signed by Col. Sani Bello Rtd, Chairman Board of Trustees of the association, lamented that the deprioritizes GenCos, leaving them with only partial payments of 9% to 11%), contrary to Power Purchase Agreement terms.
Col Bello also stated that foreign exchange and operational costs have become huge challenges, stressing that dollarized maintenance costs and lack of access to stable forex exacerbate financial strain, while high taxes, concession fees, and compliance obligations further reduce revenue.
The group therefore demanded urgent actions, including full payment of invoices, prioritization under the payment system, financing plans backed by guarantees, and regulatory reforms to ensure sustainable operations.
“On the foregoing, we hereby demand the following to URGENTLY put GenCos in a position to continue generating power for transmission and distribution to Nigerians:
“Immediate implementation of payment plans to settle all outstanding GenCos invoices.
“Prioritization of payments under the waterfall arrangement to give full priority to a hundred percent payment of GenCos’ invoices as at when due.
“A clear financing plan to backstop the exposures in the NERC’s Supplementary Order to the MYTO and the DRO 2024. ‘Provision of payment security (guarantees) backed by World Bank/AFDB to guarantee full payment to GenCos, to enable them to meet their critical needs, improve generation to Nigeria and implement their respect growth and expansion plans.
“Ensuring greater transparency in the billing, collection, and remittance process of sector funds.
“Investors focused and economy growth friendly policies and regulations to incentivise investors.
“Firm monitoring and implementation of the
Liberalisation of the market (bilateral arrangement) to create market confidence and ensure the viability and credit worthiness of the power sector.
“Ensuring full effectiveness of all market agreements, firm monitoring, and enforcement of the tules by the regulator on all market participants.
“GenCos are of the position that the liquidity challenge threatening the continued operation of their power generation plants must be addressed urgently, and sustainably too.
“Besides being owed huge debts, the GenC os also are operating under very harsh monetary and fiscal conditions, occasioned by the economic realities that face the country today. The flow of money within the power industry is one of the fundamental problem preventing Nigerians from enjoying continued and sustainable improvement in electricity supply.
“This would enable GenCos meet their critical needs which would, in turn, ensure that they sustainably generate power, so that Nigerians can have better access to reliable electricity supply. GenCos will like to emphasises that this request requires urgent attention” reads the statement in part.
