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Nigeria power generating giants Geregu and Transcorp could see a major boost from a Federal Government plan to refinance N4 trillion in outstanding electricity sector obligations.
Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, presented a memorandum before Wednesday’s Federal Executive Council (FEC) meeting for a plan to refinance N4 trillion in outstanding electricity sector obligations.
According to him, the electricity debt resolution will be executed in phases, with the first phase expected within three to four weeks under the coordination of the Debt Management Office, (DMO) and other agencies.
If successful the new power reforms could help settle N515 billion in outstanding trade receivables due to Geregu Power and Transcorp Power, both of whom are listed on Nigeria’s Stock market.
Geregu had net trade receivables of N150.56 billion as at June 2025, while Transcorp powers receivables were N365 billion as at the same time period, according to data from their financials seen by MoneyCentral.
For context Geregu revenues in H1 2025 was N55.87 billion while Transcorp Power had revenues of N205.8 billion as at June 2025.
The receivables have weighed on the shares of both power firms this year and a resolution could see them soar.
Transcorp power stock trades at 24 times earnings, while Geregu Power trades at 103 times earnings. Both stocks are down year to date with Geregu returning – 0.7% and Transcorp Power -20.39% as at August 13th 2025. The broad NGX All Share Index is up 42% year to date by comparison.
Nigeria’s power generating companies such as Geregu Power and Transcorp Power receive their revenues primarily through the Nigerian Bulk Electricity Trading Company (NBET), which acts as the intermediary purchaser of electricity from the generating companies (GenCos).
The flow of payments generally works as follows: end consumers pay power distribution companies (Discos), Discos pay NBET, and NBET pays the GenCos for the electricity generated and supplied.
However, there is a significant backlog and accumulation of unpaid receivables within this financial value chain, contributing to large trade receivables reported by Geregu and Transcorp.
This is mainly due to systemic inefficiencies and liquidity challenges in the Nigerian power sector’s financial architecture.
Discos often struggle to collect full payment from their customers, due to issues like weak consumer income, high inflation, and inefficient billing and metering practices.
NBET then faces difficulties in fully paying GenCos because of insufficient revenues collected upstream from Discos.
Tony Elumelu, the Chairman of Transcorp Group that owns a 51% stake in Transcorp Power said in April that the country’s electricity supply system would collapse if the federal government failed to urgently pay debts owed to power generation companies and accelerate long-delayed sector reforms.
“We have another excruciating burden of subsidising the sector as producers who do not get paid for the electricity we generate,” Elumelu said, at the 19th Annual General Meeting of Transnational Corporation Plc (Transcorp).
“We put it on the grid, and it is consumed on the grid,” he added. “This, you will ask, is totally not sustainable. It requires urgent attention.”
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