- Nigeria plans to fix its chronic power woes by settling outstanding debts of about $2.16 billion.
- According to the power minister, power generation companies are currently owed 1.3 trillion naira and a $1.3 billion legacy debt.
Nigeria’s power minister, Adebayo Adelabu, has said that Nigeria plans to fix its chronic power woes by settling outstanding debts of about $2.16 billion to energy producers and tackling shortages in power-generating firms.
The Power Minister said that outstanding debts, inadequate gas supplies and ageing equipment were the key barriers hampering optimal power output.
According to him, power generators are currently owed 1.3 trillion naira ($858.65 million) and a $1.3 billion legacy debt from a decade ago.
Also, he stated, “Part of preparation to turn around and transform the sector is the settlement of existing outstanding debt obligations to the gas supply and power generation companies using partly cash payments and guaranteed debt instruments.”
Last week, Adebalu proposed a naira payment for gas sales to power plants as a solution to solve dollar shortages, as costs are expected to balloon after a second currency devaluation in less than a year.
Natural gas is sold in dollars to power plants because investments tied to building gas processors and pipelines are priced and paid for in dollars.
Nigeria has 12,500 megawatts of installed capacity but only produces about a quarter of that, forcing households and businesses, including manufacturers, to resort to diesel and petrol generators.