Success Nwogu 
The N4 trillion owed electricity generation companies, if not addressed, could cause a major upheaval in the power sector, Chief Executive Officer of Energy Culture Limited, Mr. Ahmad Damcida has warned.
In an interview with New Telegraph over the weekend, he cautioned that illiquidity in the power sector could be detrimental to national and business growth.
Recall that the Chairman of the Board of Trustees, of the Association of Power Generation Companies (APGN), Col. Sani Bello (rtd), recently warned that the N4 trillion debt owed members his association, if unresolved, could lead to a prolonged national blackout and consequently socio-economic, industrial and business losses.
Bello had warned that the 23 electricity generation companies in Nigeria could no longer guarantee a steady electricity supply if they were not paid the money for the debt and lamented that they were enmeshed in a liquidity crisis in the electricity market as a result of the N4 trillion debt.
Damcida, who also is Director, Sovereign Gas Development Company Limited, further said the electricity distribution companies (DisCos) were also facing major challenges.
He said: “When you generate electricity, it is because you’ve either consumed natural gas, or if you’re a hydro plant, you would have spent a lot of money in maintaining the dam that would allow the flow of water to spin your turbines and generate electricity.
So, if you consume natural gas, you must pay for that gas, for the flow of that gas to continue. Now, outside this, you must also pay your lenders for financing the power plant.
Now, a GENCO gets paid from the ultimate collection by the electricity distribution company (DisCo). “Out of the 45 challenges, the disco is facing almost 28 challenges.
And the challenges the disco faces are, outside the basic and surface challenges, which are the technical losses, Aggregate Technical and Commercial Losses (ATC&C), there’s also the issue of power theft.
People in Nigeria build their houses to bypass air conditioning. “So, they will not put the air condition (AC), on the power grid, on the meter. They will bypass it. From day one, they build a house like that. That’s very prevalent.
You’ll see it. Or they’ll put some ACs on the meter and some not on the meter. It happens in Abuja. It happens in Lagos. It happens almost everywhere. So, this power theft is a big problem.
“There’s also the issue of vandalization, where people steal cables. People steal grounding cables. People steal earthling cables inside transformer premises. Now, there’s also the issue of poor consumption.
So, poor consumption arises from the fact that electrical systems within certain buildings are not fitted properly. So, this creates all sorts of rejection of supplies or creates all sorts of instability in the flow.
“Some people build their houses without having proper electrical systems laid out. Or electrical systems are all faulty with a lot of wires joining each other. Or we do not fake wire because they are cheap. It’s a very big problem.
And it affects the disco.” Recall that the Minister of Power, Adebayo Adelabu, had in February said that the government was owing over N4 trillion.
He confirmed that N2 trillion was being owed to GenCos as legacy debt, while another N1.9 trillion was being owed to them as part of the electricity subsidy for 2024. He also confirmed that DisCos were owed N450 billion for the 2024 electricity subsidy.
Adelabu speaking during the sixth edition of the 2025 Ministerial Press Briefing Series held at the National Press Centre, Abuja where he made his presentation of the first 100 days performance review for 2025 (Q1 2025), however a pledged the FG’s commitment to resolve the over ₦4 trillion debt owed to electricity generation companies (GenCos).
He acknowledged that among the challenges in the sector is the huge outstanding debts to the Power Generation companies in the form of unpaid government subsidies totaling N4trn as of December 2024.
He explained that N1.94 trn is the unpaid subsidy for the year 2024 alone, which, according to him, is now about N200 million monthly.
The minister assured that at least N2 trillion of the outstanding debt would be paid before the end of the year, in a bid to prevent the shutdown of power production plants across the country.
Damcida also said that another factor contributing to illiquidity in the power sector is the Niger Delta Power Holding Company, selling power at a loss so that it can stabilise tariffs.
He said: “Looking at the power situation in the country. So, now, the government itself has created a small problem. And what is this small problem?
So, if you look at the company called the Niger Delta Power Holding Company, which is the company owned by the federal government, the state government, and the local governments together.
“And this company is in charge of generating electricity, right? Yes. This company is made to sell power at a loss so that it can stabilise tariffs. It currently operates about 10 to 13 power plants.
