The Association of Power Generation Companies (APGC) has called on the Federal Government to implement fully cost-reflective tariffs, warning that the power sector’s liquidity crisis cannot be resolved without fixing its pricing structure.
While acknowledging that recent government debt restructuring programs offer temporary liquidity relief, the association stressed that injecting funds only addresses symptoms rather than the root cause of the market’s ongoing financial deficits.
The APGC highlighted that electricity tariffs remain capped well below the actual cost of power generation, transmission, and distribution.
This pricing gap led to an outstanding tariff shortfall of about ₦1.783 trillion between April 2025 and April 2026 alone, demonstrating how rapidly new debt continues to pile up.
The market currently faces a total debt repayment obligation of approximately ₦3.07 trillion over a seven-year period under two bond series.
The ₦501 billion Series 1 bond carries ₦387 billion in interest, totaling ₦888 billion in repayments, while the proposed ₦1.23 trillion Series 2 bond will generate ₦950.6 billion in interest, requiring roughly ₦2.18 trillion in total repayments.
The association warned that unless end-user prices reflect realistic market costs or government subsidies are consistently funded, liabilities by the end of the bond cycle in 2033 could surpass the debts currently being refinanced.
To establish long-term financial viability, the APGC urged coordinated action among government entities, market operators, regulators, and investors.
Beyond adopting cost-reflective tariffs, the association called for transparent billing and collection mechanisms, fully funded government subsidies, stronger enforcement of performance obligations, and the complete execution of the existing ₦4 trillion Power Sector Debt Reduction Plan framework.
The APGC emphasized that the current bond program should serve as an initial step rather than a standalone solution, maintaining that structural tariff reforms remain the only way to eliminate monthly payment deficits and restore health to the Nigerian electricity supply industry.