Nigeria plans to clear $2.16bn debt to energy producers to end power woes
Nigeria plans to fix its chronic power woes by settling outstanding
debts of about $2.16 billion to energy producers and tackling gas supply
shortages to generating firms, the power minister said on Wednesday
Africa's
largest economy 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.
Adebayo Adelabu, power minister
told reporters on Wednesday that outstanding debts, inadequate gas supplies and
ageing equipment were the key barriers hampering optimal power output.
Adelabu said power
generators are currently owed N1.3 trillion ($858.65 million), in addition to a
$1.3 billion legacy debt from a decade ago.
"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," he said.
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.
Grid power is erratic in
Nigeria, Africa's most populous nation. The grid collapsed on February 4,
causing a national blackout, and at least three times in 2023, which
authorities blamed on technical problems.
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