GenCos struggle, gas supply drops, and outages worsen as N1.85tn funding gap cripples Nigeria’s power market……
Nigeria’s electricity sector is facing renewed strain after fresh data revealed that the Federal Government paid only a fraction of its subsidy obligations in 2025, worsening liquidity challenges across the industry.
Figures from the Nigerian Electricity Regulatory Commission show that out of a required N1.928 trillion subsidy for the year, just N76.95 billion roughly four percent was disbursed.
Although N958 billion had been budgeted, the shortfall has left an estimated N1.85 trillion unpaid, further destabilising an already fragile power market.
Mounting Debt Across the Sector
A breakdown of the data highlights the scale of the burden:
- Q1 2025: N536.40 billion
- Q2 2025: N514.36 billion
- Q3 2025: N458.76 billion
- Q4 2025: N418.79 billion
Despite a gradual decline across the quarters, the cumulative deficit remains substantial.
The pressure has carried into 2026, with subsidy requirements for January alone hitting N126.48 billion, signalling that the funding gap is far from closing.
Ripple Effects: From GenCos to Gas Suppliers
Industry experts warn that the government’s inability to meet its obligations has triggered a chain reaction across the power value chain.
Generation companies (GenCos), struggling with unpaid invoices, are increasingly unable to settle payments to gas suppliers, the primary fuel source for most of Nigeria’s power plants.
This has led to reduced gas supply, directly impacting electricity generation and resulting in lower power output nationwide.
NBET at the Centre of the Storm
The crisis has also exposed structural weaknesses within the Nigerian Bulk Electricity Trading Plc, which serves as the central buyer of electricity in the market.
Former Managing Director of the Niger Delta Power Holding Company, Chiedu Ugbo, cautioned against public disputes over the exact debt figures, describing them as counterproductive.
He stressed that NBET’s financial challenges reflect deeper systemic issues, including poor revenue collection, tariff shortfalls, and long-standing structural gaps in the sector.
“This is not the time for blame,” he said, urging stakeholders to focus on collaboration and practical solutions.
Call for Government Action
Adding to the debate, former NBET Managing Director Rumundaka Wonodi emphasised that timely payments to GenCos are essential for the sector’s survival.
He argued that NBET effectively represents the government in the electricity market and must be adequately funded to meet its obligations.
According to him, failure to invest in critical infrastructure such as transmission networks and gas supply systems has compounded the sector’s challenges.
A Sector Under Pressure
The situation highlights a broader issue: Nigeria’s electricity market remains heavily dependent on government intervention, yet funding gaps continue to undermine its stability.
With rising demand, persistent infrastructure deficits, and an unsustainable tariff structure, the sector faces mounting pressure on multiple fronts.
The Bigger Picture
For millions of Nigerians, the consequences are already evident frequent outages, rising energy costs, and reduced productivity.
Unless the funding gap is addressed and structural reforms accelerated, analysts warn that the crisis could deepen, further weakening power supply and slowing economic growth.
The message from industry stakeholders is clear: without urgent and coordinated action, Nigeria’s electricity sector risks sliding into a more severe and prolonged disruption.
