Debt Crisis Forces Nigerian Power Firms to Shut Down Operations

Story: written by Myra March 18,2026
Nigeria’s electricity sector is facing deepening turmoil as mounting unpaid bills push several power generation companies out of operation, worsening the country’s long-standing energy challenges.

According to industry leaders, many operators can no longer sustain production due to severe cash shortages, leaving them unable to service equipment or pay for gas needed to run their plants.

Joy Ogaji, head of the Association of Power Generation Companies, said the crisis stems from widespread payment failures across the power value chain. She warned that without steady cash flow, maintaining infrastructure has become impossible.

Outstanding debts to power producers stood at about N6.8 trillion as of February, with liabilities continuing to rise monthly. In turn, generation companies are also indebted to gas suppliers and transport providers, further compounding the financial strain.

The situation is particularly critical given that gas-fired plants account for the majority of electricity generation in Nigeria. Many firms are now in distress, with some resorting to loans to survive, while others struggle to meet salary obligations.

Data from the Nigeria Independent System Operator shows that nearly half of the country’s power plants were offline as of Tuesday, leaving only a fraction operational and producing just over 3,700 megawatts.

Despite having a population exceeding 230 million, Nigeria’s electricity output has stagnated for years, with supply far below demand. In contrast, South Africa generates significantly more power with a much smaller population.

While the government is attempting to raise funds through local markets to settle part of the debt, industry stakeholders remain doubtful about the pace and effectiveness of the intervention.

Ogaji noted that unless the growing debt burden is addressed decisively, the sector may continue to deteriorate, leaving millions of Nigerians with even less access to reliable electricity.