“We Are at Breaking Point”: Tony Elumelu Warns of Looming Collapse in Nigeria’s Power Sector

Business magnate and philanthropist Tony Elumelu has issued a stern warning to the Federal Government, urging it to immediately settle over ₦3 trillion owed to power generation companies (GenCos), or risk a total collapse of Nigeria’s already fragile electricity sector. 

Elumelu, Chairman of Transnational Corporation Plc (Transcorp), delivered the warning at the Nigerian Economic Summit in Abuja, where he called the situation “unsustainable” and “a threat to national development.”

“How can we talk about industrialization, digital economy, or foreign investment without electricity?” Elumelu asked. “We are operating power plants and not being paid. We are literally being set up to fail.”

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The N3 trillion debt, which spans unpaid capacity charges, energy payments, and legacy liabilities from the defunct Power Holding Company of Nigeria (PHCN), has crippled the finances of many operators in the sector. Elumelu emphasized that GenCos have continued to supply power in good faith, despite poor cost recovery and mounting losses.

Transcorp, which operates one of Nigeria’s major power generation plants in Ughelli, is among the worst hit. Elumelu revealed that the company is owed over ₦250 billion in outstanding payments by the Nigerian Bulk Electricity Trading Plc (NBET), an entity responsible for paying GenCos under the market arrangement.

“This is not just bad business it’s bad governance,” he added. “The entire energy chain is choking because the backbone generation  is being starved.”

Industry insiders say the unpaid debts have led to the shutdown of turbines, delayed maintenance schedules, and an inability to invest in capacity expansion. The knock-on effect is daily blackouts, unreliable electricity supply to industries, and a drain on national productivity.

Elumelu’s remarks were met with applause by fellow business leaders, while some government officials at the summit appeared visibly tense. In response, the Minister of Power, Adebayo Adelabu, assured stakeholders that steps were being taken to clear parts of the debt through the newly restructured Nigerian Electricity Market Stabilization Fund.

“We are not blind to the crisis,” Adelabu said. “Payments have begun in tranches, and we are working with the Ministry of Finance to ensure this is addressed urgently.”

But analysts warn that partial payments and political promises may no longer be enough to stop what they describe as an impending meltdown.

“This could be Nigeria’s Eskom moment,” warned energy economist Bola Olayemi, referencing South Africa’s ongoing electricity crisis. “If we don’t pay the generators, the grid could grind to a halt.”

As Nigerians continue to rely on costly fuel generators and solar alternatives, the question remains: will the government act before the system crashes?

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