Nigeria’s power sector is facing a deepening liquidity crisis, with Transnational Corporation Plc (Transcorp) revealing that the Federal Government owes its power subsidiaries about N650 billion for electricity generated but not paid for. This development comes amid growing concerns that the sector’s mounting debts-now totaling over N1.9 trillion to generation companies in 2024 alone-could force power plants nationwide to shut down, despite substantial private investment.
Transcorp, one of the country’s largest conglomerates, posted impressive financial results in 2024, with revenue surging by 107% to N408 billion and profit after tax jumping 188% to N94.1 billion. However, CEO Owen Omogiafo warned that persistent non-payment by government agencies has slashed the company’s power capacity utilization to just 1,000 megawatts, threatening future investments and expansion.
The sector’s financial woes are largely blamed on delayed payments by government intermediaries like the Nigerian Bulk Electricity Trading Plc (NBET), which has left power producers struggling to cover essential costs such as gas procurement, maintenance, and salaries. Industry data shows that GenCos are currently paid less than 30% of their monthly invoices, with the 2024 and 2025 collection rates both falling below 30%.
Power generation companies warn that without urgent government intervention and a clear payment plan, the liquidity crunch could trigger a nationwide blackout. The 2025 federal budget has allocated only N900 billion for these debts-far short of what is owed-raising doubts about the government’s ability to meet its obligations.
Operators are calling for immediate settlement of outstanding invoices, prioritization of GenCos in payment structures, and a sustainable financing mechanism to stabilize the sector.
