By Mary Onyia
Nigeria’s worsening electricity supply crisis has been linked to over N6 trillion owed to power generation companies, GenCos, a debt that has crippled operations across the country’s electricity value chain. The GenCos say the mounting unpaid invoices have made it increasingly difficult for them to sustain power generation, resulting in prolonged outages and poor electricity supply nationwide.
According to industry figures, the Federal Government audited the debt and approved about N2.8 trillion, but power producers insist the actual amount is far higher and continues to rise by roughly N200 billion every month. The huge payment backlog has left generation companies struggling to settle obligations to gas suppliers who provide fuel for thermal power plants.
Thermal plants, which account for over 70 percent of Nigeria’s electricity generation are now receiving only about 43 percent of gas required to operate efficiently as suppliers cut deliveries due to unpaid bills. The development has significantly reduced power output across the national grid, worsening the already fragile electricity supply experienced by millions of Nigerians.
The crisis comes despite previous government efforts to boost power supply, including a N3.7 trillion electricity expansion projects wth Siemens AG aimed at raising generation capacity to 25,000 megawatts by 2025. The programme has largely stalled, with Nigeria still struggling to consistently generate 5,000 megawatts for its population of over 200 million.
Although the government issued a N501 billion bond in January to begin settling the debt, GenCos say the amount is far from sufficient. Industry stakeholders warn that unless the financial crisis in the power sector is urgently resolved, the chain reaction—from unpaid electricity bills to reduced gas supply—will continue to deepen the country’s electricity shortages, forcing more Nigerians to rely on costly generators and fuel.