Nigeria may be plunged to darkness more frequently owing to grid collapses which is expected to be frequent in coming months. The Association of Power Generation Companies told BusinessDay.
Joy Ogaji, chief executive officer of the Association in an exclusive chat with BusinessDay said that the incessant grid collapse or disturbances in Nigeria is a pointer to major structural issues bedeviling the Nigerian electricity sector to which the grid collapse is a symptom.
The Nigerian Independent System Operator (NISO), had blamed the shutdown of the grid last week on the tripping of a power generation company. The operator explained that the tripping of a GenCo, resulted in a significant load drop, which cascaded to other GenCos, leading to a system disturbance.
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However, speaking with BusinessDay, Ogaji said, “the recent grid disturbance is a symptom of a much deeper malaise. The tripping of a GenCo is often the proximate cause, but the root cause is the crippling liquidity crisis fueled by government debt.
“This debt undermines every aspect of a GenCo’s operation, from daily gas purchases to long-term maintenance, making the entire grid less stable and reliable. Addressing this debt is not just about settling past obligations; it is a critical step towards securing the future stability of Nigeria’s electricity supply.
“If the debt remains unpaid and the structural issues are not resolved, the situation could deteriorate further to more frequent grid collapses, prolonged widespread blackouts, total operational shutdown of GenCos,†she said.
She explained that the debt owed to GenCos, such as N4 trillion debt by NBET in 2024 and N762 billion from January to April 2025-NERC continue to undermine every aspect of a GenCo’s operation, from daily gas purchases to long-term maintenance, making the entire grid less stable and reliable.
According to Ogaji, the GenCos are faced with acute liquidity crisis which leads to inability to cover operational costs and deferred maintenance. The inability to cover operational costs leads to deferred maintenance.
“Without sufficient funds, GenCos cannot perform routine or major maintenance on turbines and other critical equipment. This makes the plants less reliable and more prone to sudden faults and trips, especially when being ramped up to meet grid demand.
“GenCos face difficulty in servicing their debt and equity in procuring these assets. Operations and maintenance are affected, new investments are hampered; a good example is the NIPP, which attracted very little attention due to the hurdles in the sector.
“Instances abound where GenCos have had to resort to other means other than the electricity market to support the gas and other services just to put power on the national grid,†she said.
Ogaji explained that there is lack of a clear view on the operation of the grid in the absence of an automated system that can enable others to see what is happening on the grid.
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She said that in addition to the attendant setbacks at hospitals, airports, train stations which are grounded to a halt when the grid collapses, the GenCos suffers from the volatility of the national grid, as they lose money in the frequent start and stops, loss of gas and increased maintenance costs as it portends serious risk for the Legacy GenCos, NIPP plants and other IPPs.
“As generating companies we want transparency, accountability and fairness in the governance structure which must be fair and non-discriminatory, and must be independent of any one market participant or class of participants.
“The rules of governance must prevent control, or the appearance of control, of decision-making by any class of participants.â€
