Nigeria has approved the payment of 128 million dollars to settle outstanding gas debts owed to suppliers, in a move government officials say is aimed at stabilizing power generation and restoring confidence in the country’s energy value chain. The announcement was confirmed this week by the Ministry of Power, which noted that the decision forms part of a broader push to strengthen electricity supply across the country, according to Reuters.
The payment covers verified invoices owed to gas producers, as highlighted in figures from the Ministry of Finance, and is expected to unlock additional gas volumes for power plants that have struggled with shortages. Officials said the settlement became necessary to prevent further decline in thermal power output, which accounts for the majority of electricity fed into the national grid.
The Ministry of Power stated that clearing the arrears is essential for maintaining investor confidence in Nigeria’s gas-to-power sector, adding that negotiations with private suppliers are ongoing to ensure long-term contractual stability. “This payment signals the government’s commitment to resolving structural bottlenecks that have slowed power delivery and constrained growth,” an official said.
Industry stakeholders believe the move could strengthen liquidity within the generation segment and support ongoing reforms to improve grid reliability. As noted in recent sector analyses, gas constraints have been one of the primary drivers of Nigeria’s persistent power shortages, limiting output from major power stations and reducing overall system performance.
The government said the payment forms the first phase of a wider financial framework designed to clear legacy debts while ensuring that producers receive timely payments going forward. Further announcements are expected as authorities continue to negotiate additional settlements and ramp up broader sector reforms.
