The federal government of Nigeria paid N71.49 billion of the N1.92 trillion power subsidy payment it owed electricity Generating Companies (GenCos) in 2025, as the country’s electricity crisis worsens and houses experience blackouts in the sweltering heat of March.
Documents from the Nigerian Electricity Regulatory Commission (NERC) show that the government only paid 3.7% of the entire amount owed.
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According to Daily Trust, the federal government’s requirement to provide subsidies has halted recently, resulting in a decrease in the amount of gas supplied to GenCos, who have been complaining about their incapacity to pay suppliers to produce the quantity of power required in the nation.Recall that in the absence of cost-reflective tariffs, the federal government agrees to provide tariff subsidies to close the resulting difference (between the cost-reflective and permitted tariff).
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The subsidy is only applied to the generation cost that DisCos must pay to NBET at source in the form of a DisCo’s Remittance Obligation (DRO) for administrative convenience. Based on what the permitted DisCo tariffs can cover, NBET bills the DisCos the entire GenCo invoice, which is represented by the DRO.
Nonetheless, the report revealed that 93.80 percent of the N1.23 trillion in invoices that Gencos sent to energy distribution companies (Discos) throughout the year were paid.
This indicates that they paid N1.16 trillion, leaving N71.49 billion unpaid.GenCos issued an invoice totaling N3.16 trillion, of which N1.24 trillion was paid and N1.92 trillion is still owing.
According to the paper, which included a breakdown, the government did not pay any subsidies out of the N536.4 billion it spent in the first quarter of 2025. However, the amount is part of the N4 trillion bond program, according to the paper.
However, it paid N76.95 billion of the N514.36 billion bill in the second quarter, leaving N437.41 billion unpaid.
It failed to pay the N458.76 billion and N418.79 billion invoices that were issued for the third and second quarters.
The paper further stated that the government was sent a bill for N126.48 billion for January 2026, but it has not yet made any deposit payments.According to the DisCos, they paid N310.9 billion of the N325.32 billion that was issued in the first quarter, leaving N14.42 billion unpaid. In the second quarter, they paid N287.51 billion of the N302.27 billion that was released to them, leaving N14.76 billion unpaid.
They paid N266.66 billion of the N282.12 billion payment in the third quarter, leaving N15.45 billion outstanding. Out of N326.94 billion, N300 billion was paid in the fourth quarter, leaving N26.86 billion.
However, the DisCos were able to pay N126.11 billion, or half of their January 2026 due, out of the N252.59 billion that was given to them.
What is stated in the documentJust 3.7% of the N1.92 trillion payable to GenCos for the electricity provided in 2025 is a market shortage. The tariff shortfall, or unfunded government subsidy, is the remaining N1.85 trillion. In April 2025, N76.95 billion was the only payment made for the 2025 tariff gap. DisCos accounted for 93.80% of all remittances in 2025, even though their total DRO-adjusted invoice only made up 39.07% of all GenCo invoices. For 2025, the DisCos’ remittance rate for DRO invoices was 93.80%. In 2025, GenCos’ total invoice settlement rate was 39.25%.Stranded electricity costs GenCos N36.03 billion in just two months.
In the meantime, the Gencos reported that stranded electricity generated in the first two months of 2026 cost them a total of N36.03 billion.
According to Daily Trust, the country’s transmission system continues to have flaws, as evidenced by the stranded electricity.
Despite available generation capacity, a sizable amount of power remains unevacuated (unutilized) due to transmission restrictions, according to operational data from the GenCos. This leads to extensive load shedding and an unstable electrical supply worldwide.According to the data, the average capacity of the GenCos was 7,283 megawatts (MW), but in January, the claimed generation capacity was 5,033 MW, while the generation capacity was 4,541 MW.
A loss of N18.1 billion resulted from 2,985 8.00MW becoming stuck and not being removed.
The available capacity for February was 7,492 MW, however the average generation was 4,218 MW, and the claimed generation capacity was 4,476 MW.
The stranded generation was 3,274MW, which cost N17.93 billion.FG issues a bond for N501 billion.
In the meantime, the federal government has started issuing N501.02 billion in bonds, which is largely seen as a crucial step in repositioning the energy market for long-term sustainability and restoring liquidity.
The bond, which was executed through Nigerian Bulk Electricity Trading Plc as part of a larger N4tn Presidential Power Sector Debt Reduction Programme authorized by President Bola Ahmed Tinubu, represents a strategic shift from ad hoc interventions to structured, market-driven solutions, according to a statement made by Bolaji Tunji, the Minister of Power’s media assistant.According to him, the goal of stabilizing the Nigerian Electricity Supply Industry (NESI) by enhancing cash flow throughout the value chain is at the core of the reform.
“Generation businesses were unable to fulfill their responsibilities to gas suppliers and maintain vital infrastructure because of persistent revenue deficits, which were mostly caused by underfunded subsidies and non-cost-reflective pricing. By resolving legacy debts, reestablishing the gas supply, and facilitating better plant maintenance—all crucial elements in increasing electricity generation—the bond revenues are anticipated to buck this trend.
Giving an overview of the reform, Tunji stated that the bond issuance is essential to rebuilding trust and enabling expansion throughout the electrical value chain.”This intervention is not just about settling debts; it is about resetting the foundation of the power sector,” he said. The government is building the foundation for sustained growth and better electricity supplies by improving bankability, restoring liquidity, and fostering a more stable investment environment.
The move, together with targeted subsidies and tariff adjustments, he continued, represents a conscious change in policy toward the sector’s long-term survival and full commercialization.
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