Nigeria’s electricity industry is facing a worsening financial crisis, with total liabilities projected to reach N6.2 trillion by the end of 2025.
Latest figures show that as of September, debts in the sector have already climbed to about N5.6 trillion.
This includes N2 trillion owed on 2024 generation invoices and N1.9 trillion in legacy debts dating back to 2015.
In the first half of 2025 alone, generation companies accumulated an additional N1.2 trillion in receivables, bringing the verified debt exposure to over N5.2 trillion.
The crisis has coincided with a sharp decline in reliance on the national grid.
Only about 13 percent of commercial customers remain connected, down from 20 percent in previous years, as businesses and households turn to petrol and diesel generators as well as solar power.
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Manufacturers spent roughly N1 trillion on self-generation in 2024, while states including Jigawa, Zamfara, Lagos, Delta and Katsina have signed renewable energy agreements to expand off-grid supply.
In response, the federal government has taken steps to stabilise the market.
In April, electricity subsidies were cut by 35 percent, generating about N700 billion in additional revenue and reducing tariff shortfalls from N3 trillion to N1.9 trillion.
By June, the Presidency began the process of clearing N2 trillion in verified generation debts.
In July, President Bola Tinubu approved a N4 trillion bond programme to settle outstanding liabilities, subject to final audits.
Distribution companies are also under increasing strain.
In August, a court placed Ikeja Electric and KEPCO Energy Resources under receivership, bringing to six the number of DisCos now in financial distress.
KEPCO also controls Egbin Power, Nigeria’s largest thermal plant, raising concerns over wider supply disruptions.