Power generation companies in Nigeria have criticized the federal government’s proposed N1.1 trillion allocation to the electricity sector, warning that the budget makes no provision for subsidies needed to keep the industry afloat.
The GenCos said in a statement on Monday that the budgetary plan fails to address longstanding liquidity challenges in the power sector, including unpaid invoices and rising operational costs linked to gas supply, foreign exchange and inflation.
They argued that removing subsidies without first fixing structural bottlenecks could worsen power shortages and threaten the viability of generation plants, many of which are already operating below capacity.
The companies urged the Federal Government of Nigeria to engage industry stakeholders and adopt a more realistic funding framework that reflects market conditions and protects investors.
Officials have said the government is pursuing reforms aimed at reducing its subsidy burden and attracting private investment, but GenCos warned that abrupt policy shifts could destabilize the electricity value chain.
