Nigeria’s electricity generation companies have warned that power sector debt could rise to about 17.11 trillion naira by 2033 unless the structural causes of the market’s financial crisis are addressed, despite an ongoing federal bond programme meant to resolve existing liabilities.
According to an analysis released by the Association of Power Generation Companies, debt owed to generators had reached about 7.66 trillion naira as of June 2026, with a 501 billion naira bond covering only about 7 percent of the 6.8 trillion naira in debt accumulated between 2015 and 2024. Even with a planned second bond, only about a quarter of outstanding obligations would be addressed, leaving roughly 5.07 trillion naira uncovered.
The association said the market continues to accumulate new debt each month because generators are not being paid in full for electricity supplied to the grid, citing data showing an average monthly settlement rate of just over 42 percent between January and April 2026, with generators invoicing an average of 213.5 billion naira monthly but receiving only about 90.8 billion naira. Based on this trend, the group projected total sector debt could rise steadily from 8.27 trillion naira in 2026 to 17.11 trillion naira in 2033, even as debt servicing on the two bond series alone would require roughly 3.07 trillion naira in repayments over seven years.
The association said the bond programme provides useful short term relief but does not resolve the underlying tariff shortfall, estimated at about 1.78 trillion naira between April 2025 and April 2026, and called for cost reflective tariffs, transparent billing, fully funded subsidies where government intervenes, and stronger enforcement of market obligations to prevent new debt from accumulating even as old debt is repaid.
