Nigeria is facing a potential electricity blackout as the Nigerian Midstream and Downstream Petroleum Regulatory Authority has instructed gas producers to stop supplying gas to indebted generation companies.
This could disrupt power generation and lead to widespread blackouts across the country.
In a Wednesday post on X (formerly Twitter), the Nigeria National Grid announced that the NMDPRA’s directive to cut gas supply to generation companies (GenCos) is a result of over N2 trillion in debts owed by the Federal Government and certain GenCos to gas producers.
The tweet highlighted that NMDPRA cited these substantial debts as a key factor preventing gas producers from maintaining operations.
“An electricity blackout is imminent following the Nigerian Midstream and Downstream Petroleum Regulatory Authority’s directive to gas producers to cease supplying gas to indebted generation companies (GenCos).
“NMDPRA stated that the substantial debts owed to producers had hindered their ability to sustain operations. It called on gas off-takers, particularly power generation companies, to ensure timely payment for the gas supplied.
“The federal government and some GenCos currently owe over N2 trillion in legacy debts to gas producers in Nigeria,” the tweet read.
Nigeria’s power sector remains challenged despite various government interventions, primarily due to underinvestment and a persistent lack of liquidity within the system.
In June 2024, Power Generation Companies appealed to the Federal Government to address outstanding electricity debts, warning that the over N2 trillion owed could threaten the sustainability of power generation in Nigeria.
In response, the Federal Government, through Minister of Power Adebayo Adelabu, announced in August that it had settled N205 billion of the N1.3 trillion debt owed to GenCos, aiming to improve liquidity in the power sector.
Adelabu emphasized that this payment was part of the government’s broader effort to settle debts across various segments of the power industry.
