GenCos Raise Alarm Over Gas Suppliers’ Threat To Cut Supply

GenCos Raise Alarm Over Gas Suppliers’ Threat to Cut Supply Electricity generation companies (GenCos) have raised fresh concerns over the possibility of a deeper power crisis as gas suppliers threaten to halt fuel supply to thermal power plants over mounting debts in the sector.
The warning comes amid growing financial strain in Nigeria’s electricity market, where payment shortfalls across the value chain have continued to undermine power generation and supply.
Chief executive officer of the Association of Power Generation Companies (APGC), Joy Ogaji, said gas producers are increasingly worried about the estimated N3.3 trillion owed to them by thermal power plants.
Speaking during an interview on Fresh FM on Wednesday, Ogaji explained that the mounting debt has heightened fears that gas supply to power plants could be disrupted if the payment crisis is not urgently addressed.
According to her, the root of the financial crisis in the power sector can be traced to the inability of the Nigerian Bulk Electricity Trading (NBET) Plc to fully settle payments for electricity generated by GenCos since the privatisation of the sector in 2013.
She disclosed that the Federal Government currently owes electricity generation companies about N6.8 trillion, with thermal power plants accounting for roughly 70 per cent of the total liabilities.
Ogaji said the debt attributable to thermal power plants alone stands at about N4.76 trillion, a large portion of which is linked to outstanding payments owed to gas suppliers.
“NBET is set up to buy power from GenCos and sell to distribution companies (DisCos). The aim is that as they buy power, they will pay in full, but since 2013 till today, they’ve never paid in full, so this debt is now N6.8 trillion,” she said.
She further explained that the sector’s debt burden has grown steadily in recent years due to persistent revenue shortfalls.
“From 2015 to December 2024, the debt profile grew to N4 trillion. In each month of 2025, there is a shortfall of N200 billion. If you calculate N200 billion times 12, that is N2.4 trillion, making the whole debt N6.4 trillion after December 2025,” she said.
According to Ogaji, the situation has worsened in 2026.
“We’re already in March 2026. The debt grew to N6.6 trillion in January and N6.8 trillion in February. At the end of March, you need to add N200 billion again to make it N7 trillion.”
She explained that a significant portion of the outstanding liabilities is linked to gas supply because thermal power plants account for the bulk of electricity generation on the national grid.
“The generation companies have hydros, and we have thermal power plants. The thermal power plants are the ones that use gas. The hydro plants use water, so they do not owe gas suppliers,” she said.
According to her, Nigeria currently has about 30 power plants connected to the national grid, with hydro plants contributing roughly 30 per cent of the installed capacity following the addition of the 700 megawatts Zungeru hydropower plant and other smaller facilities.
This means that about 70 per cent of the country’s grid electricity is generated by gas-fired plants, making gas supply critical to maintaining power generation levels.
“Therefore, for every N100 the thermal plants invoice NBET, about N70 belongs to the gas suppliers,” Ogaji said.
She added that applying that ratio to the total debt means that about N3.3 trillion is owed directly to gas suppliers by thermal power plants.
Ogaji said the huge outstanding payments have begun to strain relationships between GenCos and gas producers, who are increasingly demanding upfront payments before delivering fuel.
“Gas is not available because the gas suppliers have told us that if we need gas, we need to put money on the ground to get gas in the pipe. We owe them a lot of money,” she said.
She noted that despite the growing debts, gas suppliers have continued to support power generation companies, allowing thermal plants to keep operating.
“The gas suppliers have really been very kind to us. They are the reason why the thermal plants are still generating power. But now, they have told us that if there’s no payment, there will be no gas for the thermal power plants.”
Ogaji warned that the debt crisis is already affecting electricity supply across the country, contributing to persistent power shortages.
“Correct to say that the debt is the reason why we are in darkness,” she said.
Beyond operational challenges, she also highlighted the financial pressures facing generation companies, many of which took bank loans to acquire power plants during the privatisation of the electricity sector in 2013.
According to her, the continued delay in payments has made it difficult for GenCos to service those loans while also meeting operational costs such as gas procurement and plant maintenance.
Industry analysts say the mounting debts across the electricity value chain—spanning generation companies, gas suppliers, and distribution companies—remain one of the biggest structural challenges facing Nigeria’s power sector.
Without urgent intervention to clear outstanding liabilities and improve payment discipline in the market, experts warn that electricity generation could face further disruptions in the months ahead.