Several heavily indebted Nigerian power producers have halted operations as customers fail to pay their bills, leaving the companies unable to cover equipment costs or gas supply expenses.

The CEO of the Association of Power Generation Companies, Joy Ogaji, said the shutdowns reflect mounting financial pressures throughout the power-supply chain, according to Bloomberg.

“We cannot maintain the machines,” she said in an interview. “If there is no money,” they can’t be serviced, she said.

According to data from the industry association, power suppliers were owed roughly 6.8 trillion naira ($4.9 billion) at the end of February—a debt that has been accumulating since 2015 and is increasing by about 200 billion naira each month.

Ogaji noted that the power companies, in turn, owe gas and transport service providers roughly 60 per cent of the amounts owed to them.

Gas-fired thermal plants account for about 70 per cent of Nigeria’s electricity generation.

Ogaji said the mounting debt has placed many power-generation companies in a “critical situation,” with some taking out loans to continue operations and others struggling to pay staff salaries.

In certain cases, owners have personally offered collateral to keep their businesses running, she added.

Data from the Nigeria Independent System Operator, the government agency that monitors power generation, show that 16 of the country’s 33 power plants were offline as of Tuesday afternoon. The remaining plants were generating a total of 3,705 megawatts.
Nigeria, home to over 230 million people, has long struggled with power shortages.

Its total generation capacity has remained around 4,000 megawatts, and just over half of the population has access to the electricity grid. By comparison, South Africa, with 63 million people, can generate more than ten times that amount.

Ogaji expressed doubt that the government’s plan to raise 4 trillion naira from domestic capital markets to pay off power-sector debts will solve the problem, citing slow implementation.

So far, only an eighth of the target has been raised, with the remainder scheduled to come from quarterly bond sales.

“We appreciate that effort, but we’re looking at a debt from 2015 to 2026 that is still growing,” Ogaji said. If the debt stabilizes “we could have some glimmer of hope that at least things are looking up,” she said.

Nigeria produces only a small portion of the electricity its economy and population require. Even when the national grid is functioning, total output usually ranges between 4,000 and 5,000 megawatts, well short of the roughly 30,000 megawatts needed to meet the country’s demand.