Nigeria’s Grid Crisis: Power Restored but Debt Looms Over Energy Sector
Nigeria’s fragile power infrastructure faced yet another severe test this week as the national grid collapsed for the 12th time this year, plunging millions into darkness. The grid failure, which occurred at 1:36 pm on Wednesday, reduced power generation to zero, highlighting the precarious state of the country’s energy sector.
By Thursday evening, engineers from the Transmission Company of Nigeria (TCN) had restored the grid, with power generation climbing to a peak of 3,624.34 megawatts. Yet, the underlying crisis remains far from resolved, as mounting debts threaten to derail the nation’s predominantly gas-powered electricity system.
Gas Supply Cuts Spark Crisis
The collapse followed a decision by gas suppliers to halt deliveries to power generation companies (Gencos), citing unpaid debts totaling an alarming N2.7 trillion. Industry insiders reported that suppliers have been at loggerheads with Gencos and the Federal Government over delayed payments, a situation exacerbated by partial settlements and a lack of foreign exchange allocations.
Dr. Joy Ogaji, Chief Executive Officer of the Association of Power Generation Companies, painted a grim picture of the situation. “Gas suppliers have already informed our Gencos that they will not supply gas until outstanding debts are settled,” she said. “The total debt has now increased to over N2.7 trillion. We’re all sharing in the poverty that NBET (Nigerian Bulk Electricity Trading Company) is giving us.”
Government Intervenes
Faced with the specter of a nationwide blackout, the Federal Government stepped in to resolve the immediate crisis, ensuring the resumption of gas supplies and stabilising power generation. “The government cannot allow gas supply to be cut off,” an official from the Federal Ministry of Power said, speaking on condition of anonymity.
However, the intervention is widely seen as a stopgap measure rather than a sustainable solution. Insiders suggest the government may settle some of the debts, as it has done in the past, but systemic reforms remain elusive.
A Debt-Laden Energy Sector
Gas-fired plants account for approximately 70 per cent of Nigeria’s electricity generation, making the supply of natural gas critical to the stability of the grid. Any disruption in this supply chain has immediate and widespread consequences for the country’s power output.
Earlier this year, Minister of Power Adebayo Adelabu acknowledged the debt crisis and pledged that the Federal Government would begin paying down its obligations to Gencos and gas suppliers. Visiting Egbin Power Plc in Lagos, Adelabu also vowed to liaise with the Central Bank of Nigeria to prioritise foreign exchange allocations for the energy sector.
“The Federal Government is now prioritising paying down the outstanding debts, and I have assured the board and management that, effective from April, we will start paying down on debts as a form of incentive to keep operations running,” Adelabu said at the time.
A Cycle of Collapse and Recovery
While Thursday’s restoration of power generation provides temporary relief, the long-term challenges facing Nigeria’s energy sector remain daunting. The recurring grid collapses are symptomatic of deeper structural inefficiencies, from inadequate infrastructure and regulatory bottlenecks to the financial instability of key stakeholders.
As the government seeks to avert further crises, experts warn that piecemeal interventions will not suffice. Without comprehensive reforms to address the financial and operational challenges of the energy sector, Nigeria’s power grid will remain a symbol of its ongoing struggles with development and governance.
For now, the lights are back on—but for how long?
