The Senate Committee on Power has expressed alarm over the ongoing liquidity crisis in the power sector, revealing that tariff shortfalls have resulted in the government owing approximately N200bn to electricity generating companies each month.
The committee noted that the government has not made any payments to power producers this year, causing the total debt to escalate to around N800bn.
Senator Enyinnaya Abaribe, Chairman of the Committee, shared this information with journalists during a retreat in Ikot-Ekpene, Akwa Ibom State, on Saturday. The retreat, organized by the Nigerian Electricity Regulatory Commission, aimed to address critical and emerging challenges in the Nigerian power sector.
Abaribe voiced his concerns about the government’s failure to pay power firms this year, highlighting that the country is now burdened with a debt of N800bn, in addition to previous liabilities.
“I won’t be able to provide all the statistics in this brief interview, but there’s one crucial figure that Nigerians need to understand: the power sector is facing a liquidity crisis. Both the generating companies and the distribution companies are heavily indebted.
Currently, the tariff shortfall means the government owes N200 billion each month, and as of 2025, no payments have been made. This puts us at a deficit of N800 billion. Previously, we had around N3 trillion in debt owed to the generating companies, which in turn owe money to gas suppliers. The gas suppliers cannot continue to provide gas indefinitely under these circumstances,” Abaribe explained.
“The solution lies in a decisive action from both the Federal Government and the state governments. We currently have two tiers of electricity markets, and both levels of government need to collaborate and make a decision. How do we move forward?”
