LAGOS, Mar 18 – Nigeria’s power generation sector is facing deepening strain as mounting debts and liquidity challenges force several operators to halt production, raising concerns over electricity supply in Africa’s most populous nation.
Data from industry sources show that power producers were owed about 6.8 trillion naira ($4.9 billion) as of February, with the debt burden continuing to rise by an estimated 200 billion naira each month. The shortfall has disrupted operations across the value chain, leaving companies unable to maintain equipment or meet critical obligations such as gas procurement.
According to the Association of Power Generation Companies, the situation has pushed many firms into financial distress. Some operators have taken on additional loans to sustain operations, while others are struggling to pay salaries. In several cases, plant owners have reportedly used personal assets as collateral to keep their businesses afloat.
The pressure has already translated into reduced output. Sixteen of Nigeria’s 33 power plants were not generating electricity as of Tuesday, while the remaining facilities produced a combined 3,705 megawatts. This is only marginally below the country’s average generation capacity of around 4,000 megawatts, which has remained largely unchanged for years despite rising demand.
Gas-fired plants, which account for roughly 70% of Nigeria’s electricity supply, have been particularly affected, as generation companies owe gas suppliers and transporters about 60% of outstanding payments owed to them.
Nigeria’s power sector has faced recurring supply challenges over the years, with generation capacity hovering around 4,000 megawatts despite growing demand from a population of more than 230 million people.
