By Favour Pius
Nigeria’s electricity grid is facing renewed strain as mounting gas supply debts owed by power generation companies (GenCos) continue to disrupt fuel availability, forcing frequent plant shutdowns and exacerbating nationwide power instability.
Industry operators warn that the growing indebtedness to gas suppliers has created a vicious cycle of constrained generation, weak revenue flows, and persistent grid collapses, raising concerns over the sustainability of the country’s already fragile power sector.
GenCos, which rely heavily on gas-fired plants for electricity production, have struggled to meet payment obligations due to liquidity challenges across the power value chain. These challenges stem largely from inadequate remittances by distribution companies (DisCos), tariff shortfalls, and legacy debts.
As a result, gas suppliers have increasingly curtailed deliveries, citing unpaid invoices and rising operational costs. The development has led to reduced generation capacity, leaving the national grid vulnerable to fluctuations and, in some cases, total system failures.
Stakeholders say the situation has worsened in recent months, with several generation plants operating below capacity or shutting down intermittently due to gas constraints. This has contributed to erratic power supply across the country, affecting households, businesses, and critical sectors of the economy.
An industry source noted that without a sustainable mechanism to settle outstanding debts and guarantee timely payments, gas suppliers may continue to prioritise other customers, including industrial users and export markets, over the domestic power sector.
“The entire electricity value chain is under severe liquidity pressure. GenCos are not getting paid adequately, and in turn, they cannot meet their obligations to gas suppliers. This is directly impacting generation and grid stability,” the source said.
Analysts also point to structural inefficiencies within the sector, including transmission bottlenecks and aging infrastructure, which further compound the problem. Even when generation improves marginally, the grid’s limited capacity to evacuate and distribute power efficiently often results in system imbalances.
The Federal Government has repeatedly pledged to address the sector’s liquidity crisis through interventions, including payment assurance schemes and tariff reforms. However, stakeholders argue that more decisive and coordinated actions are needed to restore confidence among investors and suppliers.
Experts warn that unless urgent measures are taken to clear outstanding gas debts, improve market liquidity, and strengthen regulatory enforcement, grid instability could persist, undermining economic productivity and Nigeria’s broader energy security goals.
They further stress the need for diversification of energy sources, including renewables, to reduce overdependence on gas-fired generation and enhance the resilience of the national grid.
