Power Generation Companies (GENCOs) has said the Presidential Villa’s decision to disconnect fully from the national grid by March 2026 represented a vote of no confidence in on-grid power.
They argued that the decision, facilitated by a ₦17 billion independent solar mini-grid project, made the national grid unfit for purpose.
Besides also noted that it would further send wrong signals to investors in on-grid power, as rising debts in the sector remained alarming.
Director-General of the Energy Commission of Nigeria, Mustapha Abdullahi, had defended the project, stating that it was unsustainable for the Presidential Villa to continue paying an annual electricity bill of approximately N47 billion.
The Executive Secretary of the Association of Power Generating Companies (APGC), Joy Ogaji, who spoke on the development with The ICIR in an exclusive interview noted that the migration had been viewed in some quarters as a cost-saving measure to curb excessive billing, adding, however, that “the implication for on-grid power is severe, as it represents a sovereign vote of no confidence in the national grid.”
According to Ogaji, being the regulator, policymaker, and largest equity holder in the transmission network (TCN), bypassing its own infrastructure constitutes a total failure of the Service-Based Tariff (SBT) model.
“It signals to the market and to local and international investors that the national grid is no longer a viable platform for critical infrastructure,” she said.
The migration, Ogaji argued, not only removed a premium “Band A” consumer from the revenue pool but risked catalysing a “grid defection” domino effect among other premium industrial and government consumers. This, she said, would compound liquidity problems in the sector and weaken investors’ confidence in the sector.
She stressed that GenCos’ legacy debts surpassed ₦6 trillion (as of Q4 2025), with the recent ₦501 billion bond issuance covering less than 10 per cent of outstanding obligations, which she said would compound debt woes, adding that “This migration to solar is ill-timed as it raises an existential threat not to the GenCos but to the sector.”
She further disclosed that the Nigerian electricity market relied on a cross-subsidy model, which the exit of the Villa to solar could lead to revenue erosion.
“The loss of the Presidential Villa’s monthly billing reduces the market remittance flowing from DisCos to NBET, and ultimately to GenCos.
“If the Presidency exits grid-power, other Ministries, Departments, and Agencies (MDAs), which collectively owe billions in unpaid bills, will likely seek similar budget allocations for off-grid solutions to avoid payment, further shrinking the addressable market for GenCos.
“The loss of the Presidential Villa’s monthly billing reduces the market remittance flowing from DisCos to NBET, and ultimately to GenCos,” she added.
The Presidency’s exit is not merely an installation of solar panels; “It is a policy statement. It declares that the Nigerian national grid is unfit for purpose.”
She suggested that Nigeria needed a mix of power generation sources with a huge baseload, which provides a stable and constant supply of electricity.
The ICIR reports that Nigeria’s power sector is currently going through liquidity problems largely occasioned by an unbalanced tariff methodology and subsidies, which have impacted on investors’ trust in the market, with the GENCOs currently being owed over N6 trillion as of January 2026, with the government only able to pay N501 billion of the debt.
SOURCE: icirnigeria.org
