Tariff crisis stalls Nigeria’s gas-to-power expansion

Mkpoikana Udoma

Port Harcourt — Plans to industrialize Nigeria’s northern region and stabilize its fragile power grid risk stalling as three critical gas-fired power projects face operational uncertainty over unresolved tariff and payment issues.

The Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, called the matter “an existential threat to regional economic growth,” as he met with the Minister of Finance, Mr. Wale Edun, and leadership of the NNPC Ltd. to address the challenges plaguing the Maiduguri Emergency Power Plant, Okpai Independent Power Plant, IPP, Phase 2, and Kano IPP Phase 1.

“The sustainability of these gas-fired power plants is vital to our mission of energy security, regional economic development, and national grid stability,” Ekpo said in a statement.

At the heart of the problem are delayed payments under the Nigerian Bulk Electricity Trading, NBET, framework and persistent tariff shortfalls, which continue to undermine confidence in Nigeria’s gas-to-power market.

The Maiduguri Emergency Power Plant, commissioned to bring relief to a region plagued by insurgency and infrastructure collapse, and the Kano IPP, key to powering Nigeria’s industrial hub in the North, are among the projects facing financial strain.

“Delayed payments under the NBET framework and existing tariff gaps must be addressed quickly to prevent disruptions in power supply, particularly in Maiduguri and Kano,” Ekpo warned.

The three plants, strategically located in the North-East, North-West, and South-South regions, are key to boosting electricity access in underserved areas and attracting industrial investment. But current market distortions have made them increasingly unsustainable.

Ekpo emphasized that the situation requires immediate cross-government collaboration.

“We agreed that this issue demands inter-ministerial coordination, and I am pleased that all parties will reconvene alongside the Minister of Power to forge a lasting solution,” he noted.

Industry analysts say the inability to resolve gas supply and payment issues could derail the broader national electrification agenda and deepen energy poverty in already vulnerable regions.

Despite the challenges, Ekpo reaffirmed government’s commitment to long-term sectoral reforms.

“Our shared goal remains clear, reliable power for our people, and a fully functioning gas-to-power ecosystem. This is how we deliver on the promise of energy prosperity for Nigeria,” he concluded.

The meeting comes amid growing pressure on the government to remove bottlenecks in Nigeria’s electricity value chain and create a commercially viable framework that attracts and sustains private investment in power generation.

Provided by SyndiGate Media Inc. ( Syndigate.info ).