Federal Government’s debt owed to electricity generating companies (GenCos) have now reached N7 trillion, even as a planned resettlement option has been turned down by the operators, who insist on recovering their money.

The GenCos have also called on government to declare a state of emergency in the country’s power sector to stem growing decline and mounting debts stifling operations.

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Making the disclosure, Monday, during the virtual opening session of the three-day “Powering Nigeria’s Power Sector Leaders Training Series 2026 – Professional Track, the Executive Secretary and Chief Executive Officer of the Association of Power Generation Companies (APGC), Dr Joy Ogaji, further warned that the mounting liabilities threaten the sustainability of electricity generation and the stability of the nation’s power sector.

According to her, after the federal government’s verified claims of the N3.3 trillion, the debt later rose to N3.8 trillion just before the appointment of the Special Adviser on Power, Mr Rilwan Lanre Babalola.

Continuing, Dr. Ogaji stated that as of now the debts have now surged to nearly N7 trillion as unpaid invoices continue to accumulate.

Also, the gas suppliers had reportedly rejected the Federal Government’s proposal for a 50 per cent debt write-off.

It would be recalled that the federal government had earlier approved a N3.3 trillion financial settlement plan to clear legacy debts accumulated within the Nigerian Electricity Supply Industry (NESI) between 2015 and early 2025.

Under the arrangement, outstanding obligations to GenCos were to be settled through a combination of 10-year promissory notes and proceeds from a N501.02bn bond issued through the Nigerian Bulk Electricity Trading (NBET) Plc.

The bond issuance marked the first phase of efforts to reduce the huge market shortfalls that have constrained investments across the power sector.

However, disagreements over the reconciliation of claims between the government and GenCos have slowed implementation of the settlement framework, with industry operators insisting that the verified liabilities are significantly higher than the figures proposed by the government.

Ogaji revealed that till date GenCos have yet to receive any fresh payment despite repeated assurances by the Federal Government, just as she disclosed that government has also not completed the disbursement of the N500 billion raised through the bond market in December to offset part of the outstanding obligations owed to GenCos.

According to her, GenCos never agreed to forfeit half of the debt owed to them.

“To date, we have not received any payment. We have not accepted the N3.3tn settlement proposal,” she said.

Ogaji said, on their part, attempts to persuade gas suppliers to accept a 50 per cent reduction in the debts failed.

“When we told the gas suppliers that the Federal Government had agreed to take 50 per cent off the debts, the gas suppliers refused and told us that we are on our own,” she stated.

Ogaji, however, urged the newly appointed Minister of Power, Mr Joseph Tegbe, to demonstrate strong political will and declare a state of emergency in the power sector.

She also urged the minister to implement urgent reforms to halt the continuous accumulation of debts owed to generation companies.

According to her, the government must establish a sustainable payment framework that prevents fresh debts from piling up.

“His priority should be to stop the continuous growth of the debt profile while addressing the existing obligations,” she said.