Power generation companies (GenCos) in Nigeria have raised fresh concerns over a looming N1 trillion debt, warning that persistent liquidity challenges and stranded capacity now exceeding N2.376 trillion are threatening the sustainability of the sector.

The operators said urgent intervention by the Federal Government is required to stabilise the market, improve cash flow and prevent further deterioration of generation assets.

However, the Minister of Power, Joseph Tegbe, called on local and international investors to embrace sustainable financing models to provide electricity for Nigeria’s health facilities.

The alarm comes amid new data showing that Nigeria’s power sector continues to struggle with significant underutilisation of available capacity, despite years of incremental improvements in installed generation.

According to data presented to the National Assembly by the Association of Power Generation Companies (APGC) and obtained by The Guardian, total available generation capacity rose from 4,214 megawatts (MW) in 2013 to 7,311.20MW as of May 2026. However, actual average dispatch stood at just 4,222.40MW, leaving 3,162.40MW (43.25 per cent) of total capacity stranded.

This underutilisation has translated into substantial financial losses for GenCos, with capacity payment shortfalls estimated at over N2.376 trillion between 2015 and May 2026.

For 2026 alone, capacity payment losses had already reached N93.34 billion as of May, signalling a reversal of modest improvements recorded in 2021 and 2022.

GenCos attributed the persistent stranding of power to gas supply constraints, inadequate transmission infrastructure, and distribution bottlenecks, which continue to limit the national grid’s ability to evacuate generated electricity.

They warn that unless these structural challenges are urgently addressed, the sector risks deeper financial distress and declining investor confidence.

The operators asked the new Minister of Power to forestall further indebtedness, estimated at about N1 trillion, as they asked for immediate settlement of all outstanding payments owed by the Nigerian Bulk Electricity Trading Plc (NBET) and the market operator.

They also asked the minister to introduce a government-backed Payment Risk Guarantee (PRG) to enhance market creditworthiness and restore investor confidence.

In addition, GenCos are seeking the creation of a dedicated foreign exchange window to support Operations and Maintenance (O&M), noting that the sector remains heavily exposed to foreign currency obligations.

The GenCos, in a further push for transparency, demanded an immediate reconciliation of accounts with NBET, insisting that all outstanding obligations be publicly disclosed.

“We urgently want reconciliation with NBET so that there is clarity on what is owed,” an industry source, who pleaded anonymity, said.

DEPUTY Director, Press and Public Relations, Ministry of Power, Clement Ezeorah, in a statement in Abuja yesterday, said Tegbe made the call on the investor while speaking at the National Healthcare Electrification Investor Matchmaking Forum.

Noting that the forum was held in Lagos under the Nigeria Power for Health Initiative (NPHI), Ezeorah said it was convened by the health ministry in collaboration with UK PACT and hosted by Deputy Health Minister, Isiaq Salako.

He also said the forum brought together representatives of federal and state governments, chief medical directors (CMDs), development partners, and private-sector leaders.

Tegbe described the power sector as one of the most compelling investments on the African continent. He commended the ministry for convening the forum, noting that reliable electricity is not merely an infrastructure requirement but a fundamental pillar of healthcare delivery.

“The initiative is also aimed at strengthening coordination between power sector institutions, health authorities, regulators, and private sector partners,” he said.

According to him, there were more than 35,000 registered health facilities nationwide across primary, secondary, and tertiary levels. He said this was a substantial pipeline of bankable projects capable of attracting local and international capital to solar mini-grids, hybrid energy systems, battery storage and energy-efficiency technologies.

The minister told investors that “the strength of the framework lies not in the ambition of its vision but in the quality of its structure,” assuring them that the Federal Government would provide commitment and inter-ministerial coordination.

He noted that the Electricity Act provides the regulatory foundation for structuring power purchase agreements, licensing mini-grid operators, and enabling state-level participation.

Salako described the NPHI as a shift from donor-funded infrastructure to a sustainable energy-as-a-service model. He said that under NPHI, specialised providers finance, deploy and maintain reliable power systems for health facilities, addressing the energy poverty that undermines operating theatres, cold chain systems, diagnostics and emergency care.