Nationwide Blackout Looms as N2.7tn Debt Halts Gas Supply to Power Plants
Nigeria is grappling with a severe electricity crisis as gas producers have suspended the supply of natural gas to power generation companies (GenCos) over unpaid debts, now exceeding N2.7 trillion. This decision has triggered widespread blackouts and further destabilized the country’s energy sector.
Dr. Joy Ogaji, Chief Executive Officer of the Association of Power Generation Companies (APGC), revealed in an exclusive interview that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) instructed gas producers to cease supply to indebted GenCos until outstanding payments are resolved.
“The gas suppliers have already stopped delivering to power-generating companies,” Ogaji stated. “This isn’t a sudden development; they have informed our GenCos that supply will not resume until the debts are settled.”
Mounting Debts and a Broken System
Earlier in the year, the Federal Government pledged to address these debts, with the Minister of Power, Adebayo Adelabu, announcing plans to begin repayments by April. However, despite a N205 billion payment to GenCos in recent months, unresolved disputes between gas producers and the NMDPRA over a 0.5% wholesale levy have exacerbated the issue.
“Gas suppliers rely on payments to stay afloat, yet only a fraction of the invoices are being settled. For GenCos, 70% of costs are gas-related, and this unsustainable model is crippling the sector,” Ogaji added.
The debt crisis has led to cascading failures, including a national grid collapse on Wednesday, plunging Nigerians into darkness. Reports indicate the grid, which had peaked at 4,013 megawatts earlier in the day, dropped to zero by 2:00 PM. This marks the 12th grid collapse in 2024, sparking widespread frustration and calls for urgent action.
Consumer Advocacy and Calls for Reform
Kunle Olubiyo, President of the Nigeria Consumer Protection Network, called for a forensic audit of the debt claims by gas producers, citing inconsistencies with sector realities. He also urged the government to fully privatize the power sector to eliminate inefficiencies.
“The power sector should be managed like a business, with proper financial discipline,” Olubiyo asserted. “We need enforceable penalties for non-compliance and credit mechanisms that ensure sustainability.”
Utility Companies Seek Solutions
Electricity distribution companies, including Abuja Disco and Jos Disco, confirmed the grid collapse in official statements, assuring customers of ongoing efforts to restore power.
“We are working closely with stakeholders to stabilize the grid and resume supply,” Abuja Disco stated. Jos Disco similarly emphasized its commitment to resuming operations as soon as possible.
A Way Forward?
With over 70% of Nigeria’s electricity reliant on gas-fired plants, the sector’s vulnerabilities are on full display. Industry stakeholders, including the APGC and government officials, have notified the presidency and other relevant authorities, but concrete solutions remain elusive.
As the nation contends with worsening blackouts, the urgent need for systemic reforms, debt resolution, and infrastructure upgrades is more apparent than ever.