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Power supply may soon improve as FG pays over $120m to offset gas debts

The power minister said the recent drop in power generation in the country was due to gas suppliers halting supply for generation over the indebtedness to producers.

Power supply may soon improve as FG pays over $120m to offset gas debts [Nigeria Electricity Hub]

Hope might be on the horizon for Nigerian electricity consumers as the Federal Government announced that it has paid over $120m out of the $1.3bn owed to gas companies for gas supply to power generating plants in the country.

Nigerians are currently suffering from a massive dip in power supply to their homes and offices as power generation has plummeted since the turn of the year.

The cause of the power situation has been attributed to the decision of gas suppliers to halt gas supply to power-generating plants across the country over the indebtedness of the sector to producers.

Nigeria relies on thermal power plants for more than 70% of its electricity, while the remaining amount is sourced from hydropower-generating plants.

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Unsurprisingly, the disruption in gas supply has thrown the nation into perpetual darkness since January, with the government struggling to offset the debts.

The Minister of Power Chief Adebayo Adelabu had set up a committee to resolve the funding challenge, stressing that the crash in power supply was because Gencos are owing gas-producing firms to the tune of $1.3bn.

But, speaking at the 7th Nigeria International Energy Summit in Abuja on Thursday, February 29, 2024, the Director, Decade of Gas Secretariat, Ed Ubong, excitedly announced that the Federal Government had cleared $120m out of the total gas debts.

“As of last year, that (gas debts) was about $1.3bn, depending on how you add up the numbers. But I am pleased that between October and the end of January, the government has paid over $120m to offset some of that money.

“More importantly, the government is also now working on a framework that can mitigate most of that failure. That’s a piece of work that is ongoing and we hope that it will be approved and then the industry can move away from that legacy issue.

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“We must build capacity for that. Capacity for the engineers, and technicians that will work in this new gas sector that we are looking at for the next eight months. And as the secretary, we are committed to that,” Ubong stated.

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