N639bn unpaid gas debt threatens Nigeria’s electricity supply

Detailed summary

Nigeria’s electricity supply is under threat due to a N639bn unpaid gas debt, industry stakeholders warn, calling for a sustainable payment mechanism. Read More:…

Nigeria’s recent electricity crisis may persist unless the Federal Government addresses mounting debts in the power sector, inadequate investment in gas production and weak infrastructure, industry stakeholders have warned.

They said the failure to establish a sustainable payment mechanism for gas suppliers was undermining electricity generation, while inadequate transmission infrastructure and poor commercial arrangements had continued to frustrate efforts to improve supply.

The stakeholders spoke at the sixth annual conference of the Power Correspondents Association of Nigeria in Abuja, where they identified financial and structural challenges threatening the country’s ambition to achieve a $1tn economy by 2030 through reliable and affordable electricity.

The concerns come amid renewed electricity supply disruptions across the country. On 5 November, the Nigerian Independent System Operator attributed a decline in national grid generation to inadequate gas supply to thermal power stations and reduced water inflows into hydroelectric reservoirs, resulting in shorter supply hours and increased load shedding.

However, the Nigerian National Petroleum Company Limited subsequently said its gas transportation network remained available, arguing that gas production, commercial supply arrangements and actual deliveries to power stations must be examined separately.

Speaking at the conference, the General Manager, Gas Commercial, Nigerian National Petroleum Development Company, Bashiru Adoke, said the gas-to-power crisis was not insurmountable but warned that resolving it would require sustained investment and a reliable payment structure.

He identified the inability of power market operators to pay for gas supplied to generating companies as one of the biggest obstacles to stable electricity generation.

According to him, electricity generation companies receive insufficient payments for the power they produce, making it difficult to settle gas invoices and sustain supply.

“There…

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