Uche Cecil Izuora
Nigeria’s electricity supply industry is facing fresh challenges following unsettled huge debts.
Currently, thermal plants are receiving less than half of the fuel they need, worsening electricity supply in the country.
The shortage is tied to mounting sector debt from government subsidies, which operators say has risen to 6 trillion naira ($4.4 billion) this month. As a result, gas deliveries to power plants have dropped to less than half of required volumes
National generation has slipped to about 4,300 megawatts, forcing the grid operator to limit electricity supply – known as load shedding – and cut allocations to power distributors to keep the system stable.
Thermal stations need around 1,630 million standard cubic feet (mmscf) of gas per day, but actual supply as of February 23 was only about 692 mmscf — roughly 43 per cent of required volumes, the Nigerian Independent System Operator (NISO) said.
“The shortfall has constrained national output and reduced the amount of power allocated to distribution companies,” NISO said in a statement.
It added that when total system generation falls sharply, it must implement load shedding while distributing available energy in line with regulated allocation percentages to maintain grid stability.
Last year, the government approved a phased plan to refinance 4 trillion naira in electricity sector debt to stabilise the struggling industry. The debt — owed mainly to 27 power generation companies for unpaid invoices from 2015 to 2023 — has deterred investment and worsened already severe outages
In January, the government issued the first tranche of a N501 billion bond aimed at restoring liquidity. Operators say the measure is not enough, arguing that total debt has since climbed to 6 trillion naira.
The deteriorating supply has also hit tariff reforms. Even the roughly 15 per cent of wealthier consumers who recently saw higher tariffs based on their ability to pay and higher consumption levels are now receiving erratic electricity, prompting many to consider abandoning the grid.