Nigeria's Power Sector Faces Crisis with N6.8 Trillion Debt

Nigeria's electricity sector is facing an unprecedented crisis as generation companies (GenCos) grapple with a crippling N6.8 trillion debt, which has severely impacted their ability to maintain infrastructure and secure gas supply. According to Ogaji, the Chief Executive Officer of the Association of Power Generating Companies (APGC), the situation is critical, with GenCos unable to service their operational expenses due to persistent cash flow constraints.

As of February 2026, the debt has accumulated since 2015, increasing by approximately N200 billion monthly. The Nigerian Independent System Operator (NISO) reported that as of Tuesday afternoon, 16 power plants were offline, generating a combined 3,705 megawatts, while Nigeria's average generation hovers around 4,000 megawatts, insufficient for its population and economic activities.

The federal government announced plans to raise N4 trillion in the domestic capital market to partially address the backlog of debts owed to GenCos. However, energy finance experts warn that without urgent and comprehensive intervention, the power sector could face systemic collapse, exacerbating power shortages affecting households and industries alike.