Nigeria’s electricity sector is presently facing crisis as gas suppliers threaten to halt supply to thermal power plants over an estimated N3.3 trillion debt owed by power generation companies. Dr. Joy Ogaji, CEO of the Association of Power Generation Companies, warned that the mounting debt across the power value chain is pushing the sector toward a major collapse.
Power generation has already dropped below 4,000 megawatts in recent weeks due to gas shortages, with the 11 distribution companies sharing only about 3,053MW. Thermal plants, which account for roughly 70% of electricity on the national grid, are particularly affected, and gas suppliers are demanding payment before continuing deliveries.
The debt stems largely from unpaid obligations by the Nigerian Bulk Electricity Trading Plc to GenCos since the sector’s privatisation, which currently totals about N6.8 trillion. About N3.3 trillion of this amount is owed to gas producers, whose fuel powers most of Nigeria’s electricity.
Ogaji noted that delayed payments have also made it difficult for generation companies to service bank loans, some of which were taken in dollars when the naira was far stronger, compounding the sector’s financial strain.
Several power plants have shut down, and the Transmission Company of Nigeria has been forced to implement load shedding to ration available electricity. Consumers continue to experience prolonged blackouts, and industry stakeholders warn that any extended disruption in gas supply could further deepen the electricity shortage.
The Minister of Power, Adebayo Adelabu, said the Federal Government is working with the Minister of State for Petroleum (Gas), Ekperikpe Ekpo, to resolve the situation. Meanwhile, industry experts have highlighted that Nigeria’s vast gas reserves of over 200 trillion cubic feet remain underutilized, leaving the country struggling to meet domestic power demand despite being rich in natural resources.