Generation Companies (GenCos) has debunked a claim by the Nigeria Labour Congress (NLC) that the proposed measure by the Federal Government to settle power sector debts amounts to “political settlement.”
GenCos said NLC’s allegation is a misrepresentation of facts.
Pinnacle Daily reports that NLC recently criticised the ongoing arrangement by the Federal Government to pay between ₦2 trillion and ₦3 trillion to electricity-generating companies, alleging that it is a move to “settle the boys” as the 2027 elections approach.
NLC President Joe Ajaero, who spoke at the National Union of Electricity Employees (NUEE) yearly conference of women and youth in Abuja over the weekend, argued that there was no justification for such a massive bailout to private power generation firms.
Ajaero claimed that power sector firms have failed to deliver on their promises more than a decade after privatisation.
“If this government is serious about the welfare of Nigerians, it must stop using our commonwealth to enrich a cartel of failed investors. Every kobo of the treasury belongs to the workers and people of Nigeria,” Ajaero had stated.
He highlighted challenges in the power sector, such as power generation that has remained stuck between 4,000 and 5,000 MW, frequent national grid collapses, and rising tariffs as evidence that the private sector model has not worked for Nigerians.
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The NLC president, who called for a comprehensive review of the power sector, insisted that the government must treat power as a social service, not a profit-driven enterprise.
Reacting to the comments, the Chief Executive Officer of the Association of Power Generation Companies (APGC), Joy Ogaji, in a statement released Wednesday, February 18, rejected the NLC’s characterisation, describing the allegations as “baseless” and a “misrepresentation of the facts.”
Power Sector Liquidity Crisis
Ogaji said the intervention was necessary to address a genuine and unsustainable debt crisis in the power sector.
The APGC CEO said outstanding unpaid invoices to GenCos have now exceeded ₦6 trillion, adding that GenCos are the most financially exposed segment of the value chain, generating power that is not fully paid for.
“GenCos face the greatest risk in the electricity value chain, with outstanding unpaid invoices now exceeding ₦6 trillion,” Ogaji stated.
She stated that instead of attacking operators, attention should be focused on addressing the liquidity crisis that threatens the sustainability of electricity supply.
There has been a longstanding financial crisis within the Nigerian Electricity Supply Industry (NESI). The Federal Government’s indebtedness to power generation companies has been a persistent issue.
Reports had indicated that the debt was projected to hit ₦6.4 trillion by the end of 2025, up from previous figures. This debt stems from years of revenue shortfalls across the sector.
In late 2025, the government had proposed a debt settlement plan that required GenCos to accept a 50%, effectively forfeiting half of the over ₦5 trillion owed to them at the time. This was described as a “haircut.” The GenCos rejected this offer, insisting on full payment and warning that such a move would deter future investment. They proposed alternatives, such as an immediate payment of ₦2.4 trillion or a 10% haircut on interest payments.
Following the rejection, the Federal Government introduced the Presidential Power Sector Debt Reduction Programme (PPSDRP). Under the programme, the government recently raised ₦501 billion through the issuance of bonds to settle the debts owed to GenCos. This was part of a negotiated agreement where 14 GenCos signed off on a total settlement package valued at approximately ₦827 billion.
Special Adviser to President Tinubu on Energy, Olu Verheijen, described the move as a “decisive reset” of the electricity market.
We’re Open to Scrutiny – GenCos
While rejecting NLC’s claims on the proposed intervention support, GenCos said they are willing to subject their financial records to any form of investigation about their dealings.
“If the NLC or any other institution considers it necessary, our books are available for any form of investigation. What is important is to identify the real causes of the sector’s challenges and work collaboratively toward sustainable solutions,” Ogaji stated.
Concerns about the Power debt settlement
Energy experts have warned that without addressing the structural issues in the sector, such as transmission bottlenecks, poor metering, and revenue collection, simply paying off debts will not solve the underlying crisis.
There are concerns that such interventions risk becoming a vicious cycle of debt recycling that benefits financial and political interests without improving power supply for ordinary Nigerians
Victor Ezeja is a passionate journalist, scholar and analyst of socioeconomic issues in Nigeria and Africa. He is skilled in energy reporting, business and economy, and holds a master's degree in mass communication.
