Nigerian Power Generation Companies Disagree with Government's Plan to Cut Electricity Subsidies by 2026

Power generation companies in Nigeria, represented by Joi Ogaji, have expressed disagreement with the federal government's decision to cease bearing electricity subsidies by 2026. Ogaji argues that the burden should be distributed among federal, state, and local governments to manage the financial strain.

She highlights that the current situation, where generation companies are receiving less than 35% of their monthly invoices, is unsustainable. The companies are grappling with outstanding debts amounting to N6.4 trillion as of December 2025.

The Nigerian Electricity Regulatory Commission has not officially approved any documents recognizing the subsidy or tariff calculations. The government's proposal to deduct electricity subsidy payments directly from statutory allocations to states through the Federation Account Allocation Committee has sparked mixed reactions from industry players.

Sundai Oduntan of the Nigerian Electricity Distributors supports the plan but emphasizes the need for a fair and data-driven approach to support vulnerable consumers. Tanimu Yakubu from the Budget Office underscores the necessity of clear identification and funding of electricity-related costs to prevent financial gaps.

The government's move to address historical debts in the power sector through bond issuances is part of broader efforts to improve electricity services and resolve longstanding financial challenges.