Nigeria’s Power Ministry starved as GenCos’ debt hits N6.6trn

Nigeria’s Ministry of Power is facing a severe funding crunch, having received no capital allocation in 2025, even as debts owed to electricity generation companies (GenCos) surged from N4 trillion in 2024 to N6.6 trillion as of February 2026.

Last year, the Bola Tinubu-led federal government did not release a single naira for capital projects in the ministry, hampering efforts to build transmission lines, upgrade substations, and connect the estimated 85 million Nigerians still without access to electricity.

“There are three components to the budget: salaries and wages, overhead costs, and capital expenditure,” Minister of Power, Mr. Adebayo Adelabu, told the Senate Committee on Power during his 2026 budget defence. “The first two were fully funded, but capital expenditure recorded zero percent.”

Mr Adelabu further disclosed that only 30 percent of the 2025 capital budget is expected to be released to the ministry by the end of March 2026, with the remaining 70 percent slated for implementation across the rest of the year.

READ ALSO: After leaving Nigerians in darkness in December, Adelabu now promises steady power in 2026

“The Federal Government is taking all necessary steps to ensure that the fiscal shortfall, which affected the 2025 budget, does not recur in 2026. Mr President emphasised this during the presentation of the 2026 appropriation to the joint National Assembly, giving us confidence in better budget execution this year,” the minister added.

Despite the funding gap, Adelabu sought to reassure lawmakers that the absence of capital releases did not trigger a collapse of electricity supply. He cited a relatively stable grid in 2025, with only one major disruption on September 12 caused by gas pipeline vandalism in the Niger Delta. By contrast, 2024 experienced one full grid collapse and roughly four other disturbances, even with what the minister described as stronger budget implementation that year.

“So it is incorrect to claim that the lack of funds plunged the nation into darkness in 2025,” Adelabu insisted, a point likely to ring hollow for millions of Nigerian households and businesses forced to rely on expensive diesel generators to compensate for the unreliable national grid.

Nigeria currently generates between 4,000 and 5,000 megawatts (MW) of electricity most days, a figure that has remained stagnant for years despite repeated government promises to double or even triple capacity. For comparison, South Africa, with roughly a third of Nigeria’s population, produces more than four times as much electricity, while Egypt also generates over four times Nigeria’s output.

GenCos’ rising debt

The rising debt burden has hit power generation companies particularly hard. In April 2025, GenCos warned that the N4 trillion unpaid debt owed by the federal government and other stakeholders for electricity generated threatened their operations.

Chief Executive Officer of the Association of Power Generation Companies (APGC), Dr Joy Ogaji, said the debt had climbed to N6.6 trillion, stressing the urgent need for substantial settlement.

She recalled that President Bola Tinubu had promised to clear the N4 trillion debt in July 2025 but failed to deliver, appealing to the president to honour that commitment.

READ ALSO: 2025 budget: How agencies under Ministry of Power plan to spend millions of naira on generator fuel

“In July last year, the president promised to clear the N4 trillion debt at that time. If the president of the largest black nation in the world promises to clear my debt, I will take it to the bank,” Dr. Ogaji said during Arise News Morning Show on Thursday, recalling the pledge made to the generating companies.

“The president categorically appealed to us that he will approve N4 trillion. His handlers appear to have hijacked the N4 trillion and decided how they want it.,” she said, stressing that the power sector had professionals who could fix the issues in the industry.

“We have seasoned people who can make the power sector work. Aliko Dangote recently suggested setting up a power forum. It is critical and should be chaired by the president. However, it is a committee that should be filled with technocrats.”