APGC urges Federal Government to extend N3.6tn power subsidy beyond 2028, warning liquidity challenges cannot be solved in three years

The Association of Power Generation Companies (APGC) has called on the Federal Government to extend its proposed N3.6 trillion electricity subsidy payment plan beyond 2028, warning that the sector’s liquidity crisis cannot be resolved within three years.

Also read: Nigeria risks blackouts as GenCos cut supply over N5.6tn debt

Chief Executive Officer of APGC, Joy Ogaji, made the appeal while reacting to the Medium-Term Expenditure Framework Fiscal Strategy Paper for 2026-2028, which outlines N1.2 trillion in subsidy payments for each year between 2026 and 2028.

The plan is aimed at distributing the financial burden across federal, state, and local governments.

Ogaji welcomed the government’s proactive approach but cautioned that the plan would fall short if it is not fully appropriated, transparently implemented, and backed by strong political will.

“We appreciate the Federal Government for coming up with this proactive approach. We are hoping that it is fully appropriated and that the funds are actually paid to the GenCos,” she said.

The APGC CEO questioned why the subsidy framework is limited to three years, warning that unrealistic expectations of a sudden turnaround after 2028 risk undermining sector stability.

“Is it not possible to extend the period beyond 2028? Are we expecting a miracle after 2028?” she asked, stressing that the plan alone does not address structural weaknesses in financial discipline and accountability across the value chain.

Ogaji also highlighted the need for retroactive action to clear outstanding debts owed to power generation companies.

Legacy obligations, she said, continue to constrain operations and investment in generation capacity.

“The power sector wound is beyond plasters and bandages. There is a cure a renewed focus on the sector with strong political will,” she added.

Despite these concerns, Ogaji expressed confidence in the Federal Government’s ability to implement lasting reforms, noting that GenCos remain ready to collaborate to achieve sustainable sector success.

Industry stakeholders, however, remain cautious.

Past experiences suggest budgetary provisions often fail to translate into timely payments, raising concerns over the transparency, consistency, and effectiveness of the proposed subsidy.

The Federal Government has recently issued a ₦501 billion bond to partially settle the ₦4 trillion legacy debt owed to generation companies.

Yet, Ogaji warned that debts continue to rise by roughly ₦200 billion monthly, with total obligations through the Nigeria Electricity Trading Plc reaching ₦6.4 trillion as of December 2025.

She noted that the bond, structured over seven years, addresses historical debt but does not resolve ongoing shortfalls.