The Nigerian government has announced its plan to start paying off N130 billion in gas supply debts within the Nigerian Electricity Supply Industry, NESI.
Speaking at the 2024 Eighth Africa Energy Marketplace in Abuja on Thursday, Minister of Power, Adebayo Adelabu, disclosed that President Bola Tinubu has authorized the Minister of State for Petroleum Resources (Gas) to settle the outstanding debts owed to gas supply companies by power sector operators.
Adelabu mentioned that the payments will be divided into two parts – one for legacy debts and one for current debts.
He stated, “For the current debt, approval has been granted for a payment of around N130 billion from the gas stabilization fund, which will be paid by the Federal Ministry of Finance.”
“The legacy debt payment will be sourced from future royalties and income exchanges in the gas sub-sector, which is deemed acceptable to the gas supply companies,” he added.
Adelabu outlined the government’s intention to implement a model that ensures solid contracts between gas companies and most power-generating companies to ensure consistent power generation.
He noted that the total debt for power-generating companies amounts to N1.3 trillion.
The ministry has the President’s approval to settle the reconciliation of debts between the government and power-generating companies, as confirmed through signed agreements between the parties involved.
To handle the payment, Adelabu mentioned that the government will employ a two-fold approach – an immediate cash injection along with settling the remainder through a guaranteed debt instrument, such as a promissory note, due to financial constraints.
