•Generation capacity dips 15% in five years
•Power sector debt hits N6.8 trillion – GENCOs
•Have Presidency, Adelabu given up?
By Ediri Ejoh
The hope for Nigerians to experience a steady and efficient power supply may be far from reality, as the
country continues to endure severe hardship due to a chronic and unstable electricity supply, bedeviling the power sector.
The recent statement by the Nigerian Independent System Operator (NISO), which puts the country’s average electricity generation at 4,300 megawatts (MW), further exposes the sector’s gross shortfall of 11,200MW when compared to available generation capacity of 15,500MW.
This is even as stockholders are calling for a state of emergency in the country’s ailing power sector, which has defied past investment.
Additionally, despite billions of naira invested in the power sector over the last five years, the country’s available generation capacity has decreased by 15 percent to 6,773.10 megawatts as of 2025, compared to 7,792.51 megawatts recorded in 2020.
With a growing population of over 242 million and a total installed capacity of approximately 13,625 MW, Nigeria requires between 30,000 MW and 100,000 MW of generated power to sustain a constant and stable electricity supply nationwide.
In a document obtained by Sunday Vanguard, trajectories revealed little or no effect of funds supposedly injected into the power sector, as supply across the country remains abysmal, forcing a greater number of customers to confide in other generation alternatives to ease their sufferings and sustain their businesses.
According to the document, the available generation capacity in 2020 stood at 7,792.51mw, saw a sharp decrease to 6,336.52mw in 2021; dropped further to 5,757.03mw in 2022; rose again to 6,428.38mw, 6,358.79, and 6,77.10mw in 2023,2024 and 2025, respectively.
While this was recorded, the country’s average generation capacity also saw a marginal increase by 12.59 percent to 4,633.79mw in 2025 against 4,050.07mw recorded five years ago (2020).
The document also revealed that the average generation capacity recorded 4,050.07mw in2020, 4,118.98mw in 2021, dropped to 3,940.54mw in 2022, rose again to 4,201.42mw, 4,178.49mw and 4,633.79mw in 2023, 2024 and 2025, respectively.
Investment so far
(2020–2025)
The CBN Interventions (N2.3 trillion): As of 2023, the Central Bank of Nigeria had injected over ¦ 2.3 trillion into the power sector for infrastructure, meters, and to support Generation and Distribution companies (GENCOs/DISCOs).
“Government Debt Clearance (¦ 501 billion & N1.3 trillion): To tackle an over ¦ 4 trillion debt to GenCos, government raised ¦ 501 billion in bonds in early 2026. Additionally, government initiated a ¦ 1.3 trillion plan to settle debts to GenCos via cash injections and promissory notes.
“World Bank & Int’l Partners ($2 billion): The World Bank has invested over $2 billion in the last five years, including the Nigeria Electrification Project (NEP) and the $750 million DARES program.
“Presidential Power Initiative (PPI): Phase one of the Siemens-partnered grid upgrade (PPI) began, aimed at increasing transmission capacity. “2025 Budget Allocations: The 2025 budget included ¦ 269.74 billion for special intervention power projects and ¦ 47.35 billion for substations.”
Blame game
The Nigerian Independent System Operator (NISO) said, in a statement, that the country’s average electricity generation at 4,300 megawatts (MW) vastly attributed to inadequate gas deliveries to generation companies for the reduced output.
Thermal plants, which account for the bulk of Nigeria’s generation mix, require an estimated 1,629.75 million standard cubic feet (MMSCF) of gas per day to operate at optimal capacity.
However, as of February 23, 2026, actual gas supply stood at approximately 692 MMSCF per day, representing less than 43 percent of daily requirements.
The shortfall of about 937 MMSCF per day has sharply constrained available generation capacity, directly reducing the volume of electricity dispatched to Distribution Companies (DisCos).
Energy allocation to DisCos, NISO clarified, reflects the reduced supply on the grid rather than discretionary curtailment.
“With thermal plants forming the dominant share of Nigeria’s generation mix, any disruption in gas supply directly impacts grid output,” the system operator said.
NISO said that when total system generation drops significantly, it is required to implement load shedding to safeguard grid stability and prevent system disturbances.
Available energy is dispatched in line with the Nigerian Electricity Regulatory Commission’s Multi-Year Tariff Order (MYTO) allocation framework across all distribution networks.
NISO said it is working with relevant stakeholders to improve gas availability and restore generation capacity, while expressing regret over the inconvenience to consumers and market participants.
Power sector debt hits N6.8 trillion – GENCOs
While NISO blamed gas shortage on the recent downturn in the sector, GENCOs have raised the alarm over the sector’s indebtedness which, it stated, had increased to N6.8 trillion in February 2026 and is expected to rise by 33 percent by the end of the year 2026.
In a document obtained by Sunday Vanguard, the GENCOs called on the Federal Government to take structural action as a matter of urgency.
The GENCOs added that the debt in 2025 alone stood at N2.4 trillion, going by the N200 billion monthly shortfall.
It noted: “Out of N280 billion monthly invoices issued to the sector, only 35 percent were paid. However, the debt has accrued to N6.8 trillion now and will reach N8.8 trillion by December.”
On the sector’s challenges, it stated: “Installed capacity increased to 15,500MW, but has only been able to transmit 5,000megawatts with a low collection shortfalls.
“We call for a presidential-led reform, a long-term debt solution, a strengthened value chain, and investor confidence to be restored to the sector.
“GENCOs operate 24 hours a day, 365 days a year. Regardless of market constraints, liquidity challenges, fuel limitations, or infrastructure bottlenecks, their work continues uninterrupted.
“While power interruptions are often visible to the public, the effort required to sustain generation under difficult conditions remains largely unseen.
“GENCOs and their Generation Control Centres are the silent force behind electricity supply: unheralded, yet indispensable. “Without their continuous operational discipline and technical expertise, the entire power value chain would grind to a halt.”
Meanwhile, the GENCOs have rejected the Federal Government’s recent settlement offer of ¦ 2.8 trillion, disputing it as an inaccurate reflection of their verified legacy debts.
While government characterizes this sum as the final, audited liability for accumulated subsidies, GenCos insist the figure is misleading and demand transparency regarding the basis of the computation.
Presidency, Adelabu give up?
In what seems to be a ‘frustration been put to bed’, the Presidency and the Minister of Power have resorted to exiting the national infrastructure off-grid.
Investigation revealed the recent off-grid plans and signpost at the Power House in Abuja.
Sunday Vanguard gathered that the Minister of Power, Mr Adebayo Adelabu, had embarked on the construction of 1mw hybrid solar PV Power Plant at the Power House, Maitama, Abuja.
Recall that in 2018, the Ministry of Power had indicated plans to disengage from using electricity from the national grid to power its activities at its headquarters in Maitama, Abuja, and subsequently turn to a hybrid solar mini grid network expected to be installed on its rooftop by a consortium.
The system, according to the lead project company – Proserve Energy Services Limited – would cost about $2.5 million to install with a 750-kilowatt (kW) daytime and 75kW night time generation capacity.
It will equally be built with funding from the consortium while the ministry takes electricity from the system over a 10-year period.
This development, according to industry watchers, revealed a colossal disintegration and political will to bring succour to the ailing country’s power sector, which is not bedeviled with generation capacity but longed starved of investment and capacity on both the Transmission (government) and Distribution Companies, DISCOs, decayed infrastructure.
This lacuna may not come as a surprise to observers in the industry, and Nigerians were thrown under the bus when the Presidency, last month, announced plans to invest heavily in a solar power project to move the Aso Rock Presidential Villa off the national grid by March 2026, aiming to reduce high energy costs and stabilize supply.
In what might be perceived as hope-dashing, barely 17 months to the expiration of a four -year tenure and a promise made by President Bola Ahmed Tinubu, during electioneering campaign, to address the ailing power crisis in four years, Nigerians have had a series of erratic power supply occasioned by frequent system collapses during this period under review.
Meanwhile, this is also followed by a ¦ 10 billion budget in 2025 for the Aso Rock solar project, and an additional ¦ 7 billion was proposed for 2026 to complete the installation.
Sunday Vanguard gathered that the development posed fears to the future of the country’s national grid, as Nigerians, the government, and major businesses are exiting the grid to embedded power supply.
Reacting to the project and its relevance to the power sector, Adelabu stated that the project was viable, saying: “Yes, it’s to encourage people to have solar alternative for cost dilution, reliability and climate protection.
“There is nothing bad in it. Even the advanced countries are going for renewable energy.”
Experts’ opinion
Experts in the power sector have attributed policy inconsistency, regulatory lacuna, corruption, and lack of political will to challenges hampering growth in the power sector.
Reacting to the development, an expert calls for the removal of the Minister of Power over the gross inefficiency rocking the sector.
In an interview, the Executive Director of PowerUp Nigeria, Adetayo Adegbemle, said: “The Federal Government needs to reverse the trend where industries are disconnecting from the grid, as this has left residential consumers shouldering the burden of sustaining the network, making tariffs more costly.
“In a working system, the minister would have been sacked and replaced after eight months of incompetence.
“If government is intentional about growing the power sector, eight to 10 months should be given as a target, after which evaluation and actions are taken.
“That will salvage and push the needed development in the power sector.
“We have allowed the big guns to escape the national grid, pushing the load of sustaining it onto residential consumers.
“The tariff becomes more expensive for them, while producers continue to seek alternatives, albeit more costly.
“The Federal Government should, as a matter of urgency, reverse this trend.
“I have previously mentioned how the money manufacturers are spending on alternative energy sources should be reeled into the national grid—first, to ensure grid stability, and then to reduce the cost of grid electricity”.
Adegbemle emphasised that reintegrating industries into the grid would enhance industrial competitiveness, create jobs, lower production costs, ensure grid stability, reduce tariffs for consumers, and increase electricity generation with reliable off-takers and payments.
He argued that a stable and well-utilized grid would also reduce government’s electricity subsidy burden.
For the GENCOs, the expert said the development is severe with cascading consequences, adding: “While public discourse frames this as a cost-saving measure to curb ‘excessive billing,’ the strategic implication for On-Grid Power GENCOs is severe with cascading consequences in addition to the fact that it represents a sovereign vote of no confidence on the national grid.”
The Executive Director of the Association of Power Generation Companies (APGC), Dr. Joy Ogaji, for his part, said, “The Federal Government is the regulator, policymaker, and largest equity holder in the transmission network (TCN).
“For the regulator to bypass its own infrastructure cites a total failure of the Service-Based Tariff (SBT) model. It signals to the market & to local and international investors that the national grid is no longer a viable platform for critical infrastructure.
“This move not only removes a premium ‘Band A’ consumer from the revenue pool but risks catalysing a ‘grid defection’ domino effect among other premium industrial and government consumers.
“With GENCOs’ legacy debts now surpassing ¦ 6 trillion (as of Q4 2025) and the recent ¦ 501 billion bond issuance covering less than 10 percent of outstanding obligations, this defection is ill-timed as it raises an existential threat not on the GenCos but on the sector.
“Through payment for on-grid power, NERC, NBET, NISO, TCN & CBN are paid.
“The Presidency’s exit will exacerbate the sector’s liquidity crisis, deepen the ‘stranded capacity’ dilemma, and accelerate the financial ‘death spiral’ of the NESI in addition to frustrating the policy directive of Vision 30:30:30 in achieving universal energy access with industrial growth unless immediate structural pivots are executed.”
Also reacting, an energy economist and Executive Director, Emmanuel Egbigah Foundation, Prof. Wumi Iledare, said, “The anomaly in Nigeria’s electricity pricing structure is what appears to be driving revenue growth—not efficiency, not improved service delivery, and certainly not fairness.
“I am not aware of any energy pricing framework anywhere else that is this inefficient in resource allocation while simultaneously ignoring ethics, equity, and effectiveness.”
Corroborating the position, Muda Yusuf of the Centre for the Promotion of Private Enterprise (CPPE) argued, “Nigeria’s power sector remains one of the most challenging areas of the country’s economic reform agenda.
“Despite multiple reform efforts over the years, the sector continues to face deep structural, financial, and governance challenges.
“These challenges are multi-dimensional, spanning political economy constraints, tariff distortions, weak investor capacity, transmission bottlenecks, and a persistent liquidity crisis across the value chain.
“The inability to implement a fully cost-reflective tariff regime—largely due to social and political sensitivities following recent macroeconomic reforms—has entrenched subsidy dependence and widened the sector’s financing gap.
“As a result, government intervention has become unavoidable in the short term to prevent system collapse and sustain the electricity supply.
“However, the current trajectory, characterised by rising sector debt currently at about ¦ 4 trillion, is fiscally unsustainable without deeper structural corrections, improved transparency, and gradual but credible reform implementation.”
He added that power sector reform has long been recognised as central to Nigeria’s economic competitiveness, industrial growth, and social welfare.
“Yet progress has been slow and uneven”, Yusuf pointed out.
“Power sector reform in Nigeria is a long-term and incremental process rather than a quick fix.
“The sector’s complexity, political economy constraints, and institutional weaknesses mean that progress will be gradual.
“However, without decisive action to address structural inefficiencies, improve governance, and ensure fiscal discipline, the current trajectory will remain unsustainable.
“A balanced approach—combining short-term government support with medium- to long-term structural reform—is essential to building a financially viable, reliable, and inclusive power sector that can support Nigeria’s economic growth and development.”
To this end, Sunday Vanguard posits that until a state of emergency is declared and bureaucrats are appointed over political undertone in the power sector, Nigerians’ hope to experience a stable electricity supply will be sunk in a mirage.
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