Joseph Bakare
The Association of Power Generation Companies (GenCos) is seeking fro enhanced collaboration among stakeholders in Nigeria’s electricity sector to strengthen market operations and improve power supply nationwide.
The Association, notes that electricity generation requires significant investment and strict adherence to contractual agreements, particularly Power Purchase Agreements (PPAs).
According to GenCos, these agreements are designed to ensure fairness, sustainability, and investor confidence in the sector.
The Chief Executive Officer (CEO) of APGC, Joy Ogaji, has further raised concerns over persistent challenges in the industry, including unpaid capacity charges, weak enforcement of PPAs, and systemic market inefficiencies.
She lamented the current payment structure, describing GenCos as the most disadvantaged participants in the Nigerian Electricity Supply Industry (NESI) value chain.
She also noted that many power generation companies are operating at significant losses due to inadequate revenue recovery.
Ogaji further explained that although power plants make substantial capacity available for generation, not all of it is utilised because of system constraints.
She said this underscores the need for better coordination among generation, transmission, and distribution segments to maximise available resources.
GenCos emphasised that all PPAs are approved by the Nigerian Electricity Regulatory Commission (NERC), while payments are processed through the Nigerian Bulk Electricity Trading Plc (NBET).
The Association, however, noted that many power plants still operate without active PPAs, making it difficult to secure gas supply and long-term financing.
The group also attributed recurring losses in the sector to limited transmission capacity, weak distribution networks, and low revenue collection.
While commending ongoing efforts by regulators and government agencies to improve market structure and liquidity, GenCos stressed that additional support is required to ensure long-term stability.
According to the association, challenges such as network constraints and revenue shortfalls have affected overall sector performance and require collective solutions rather than blame.
GenCos further stated that timely and adequate payments are essential for sustaining operations, maintaining facilities, and attracting new investments.
They added that improved market discipline and stronger contract enforcement would enhance investor confidence and promote sector growth.
Currently, power generation companies reportedly receive only about 35 percent of their entitlements, resulting in accumulated debts of over ₦6.2 trillion.
The association warned that this situation has left many GenCos financially distressed and unable to expand or properly maintain their facilities.
They reaffirmed its commitment to working closely with government institutions, regulators, and other industry stakeholders to strengthen Nigeria’s electricity market. expressing optimism that through sustained dialogue and cooperation, the sector can achieve reliable, affordable, and sustainable power supply for Nigerians.