July 25, 2024
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Nigerian Gas Producers to be Settled 1.6bn Outstanding Debt.

In its effort to fix the problem of power shortage and blackout in some parts of the country, the federal government of Nigeria, has decided to settle an outstanding debt of about $2.16 billion to energy producers as well as tackle gas supply shortages to generating firms.

Nigeria has about 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.

Nigeria’s power minister, Adebayo Adelabu, had on Wednesday, highlighted outstanding debts, inadequate gas supplies and ageing equipment as the key issues that are disrupting adequate power supply in the country.

Power generators are currently owed 1.3 trillion naira ($858.65 million), in addition to a $1.3 billion legacy debt from a decade ago, he explained.

“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.

Adelabu had last week, proposed 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.

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