- The power sector’s indebtedness to electricity generating companies and gas companies had risen to over N3 trillion.
- As of last year, the arrears owed to gas producers was about $ 1.3 billion.
The federal government has paid over $120 million to offset some of the debts owed to the gas companies (GasCos). The Director, Decade of Gas Secretariat, Ed Ubong, disclosed this at the ongoing 7th edition of the Nigeria International Energy Summit (NIES 2024) in Abuja on Thursday.
According to him, the arrears owed to gas producers as of last year was about $ 1.3 billion. However, between October 2023 and the end of January, the government has paid over $120 million to offset some of that money.
The federal government had attributed the leading cause of poor power supply to the country to the low supply of gas to generating companies. This debt in the sector was among the factors eroding investors’ confidence and investments.
In January, the Transmission Company of Nigeria (TCN) revealed a gradual decrease in available generation into the grid due to gas constraints. The company said this impacted the quantum of bulk power available on the transmission grid for onward transmission to the distribution load centres nationwide.
On the solutions to the legacy issues in the sector, Ubong stated that the government is working on a framework to mitigate most of the failures, hoping for approval. He stressed the need to build capacity for gas, hence disclosing that the gas secretariat is looking for interns and young people to support the sector’s goals.
“For the first time, we now have a ministerial committee that involves the minister of State for Gas and the Ministry of Power. Because power and gas go together. We are confident that when that becomes fully operational, that critical link between gas and power will lead to more sustainable solutions going forward,” he added.
Earlier in February, the Minister of Power, Adebayo Adelabu, said that the indebtedness of the country’s power sector to electricity generating companies (GenCos) and gas companies (GasCos) had risen to over N3 trillion.
He said, “Today, we are owing a total of N1.3 trillion to the power generating companies, out of which 60 per cent is owed to gas suppliers. Today, we have a legacy debt, before 2014, to the gas companies of $1.3 billion; at today’s rate, that is close to N2 trillion.
“Now, if you add N2 trillion legacy debt owed to gas companies and the N1.3 trillion owed to GenCos, we have an inherited debt of over N3 trillion in this sector. How will the sector move forward? Nigerians deserve the right to know this.”
The minister, however, revealed that the ministry is working underground to resolve these issues and pay these debts through cash injections or guaranteed debt instruments to ensure continuity in power generation.