BY MONICA MADUEKWE

Nigeria’s power crisis is often framed as a shortage of gas. In reality, gas exists. What is missing is a system that ensures it reaches generation companies on commercially reliable terms.

The reason gas fails to reach power plants today is not a lack of availability, but a lack of payment.

Over the past decade, gas has been supplied into the power sector under increasingly uncertain settlement conditions. Generation companies procure on credit. Payments are delayed. Debts accumulate. Suppliers, in turn, scale back or redirect supply to more reliable buyers, including export markets.

The result Is predictable: gas flows away from the power sector, not toward it.

Nigeria has not been inactive in addressing this. Institutions such as NBET Plc, liquidity interventions led by the CBN, and government-issued bonds to settle legacy debts have all sought to stabilise the system. These measures have provided temporary relief. But they share a common limitation: they remain fiscal and administrative responses to what is fundamentally a commercial problem.

The current approach, i.e. issuing bonds to settle legacy debts owed primarily to generation companies, may provide temporary relief, but it is inherently delicate. It transfers the burden to the public balance sheet without changing the structure that created the problem. Borrowing to pay for past consumption, in a system where payment discipline remains weak, only postpones the risk and increases future exposure.

There is, however, a more durable alternative, one that does not rely on continued fiscal absorption.

Rather than asking government to carry these obligations, the outstanding payment claims within the gas-to-power value chain, anchored primarily at the generation level, can be restructured into a commercially managed vehicle, where private investors step in at the level of the system, not individual counterparties, to take an active position in future gas supply and settlement.

In practical terms, this means creating a structure that steps into these validated payment obligations, working alongside existing market operators to restructure and manage them over time, backed by identifiable cash flows within the system. In return, the vehicle secures priority over gas supply arrangements and participates directly in how those flows are priced and settled going forward.

This fundamentally changes the incentive structure. Rather than chasing arrears, our objective must be a functioning market where gas supplied equals gas paid for every single time. The draw for investors is not the fixing of inefficiency, but the opportunity to participate in a constrained and valuable energy flow with commercial upside linked to performance.

And its execution is not merely theoretical. The debt stock already exists. The counterparties are known. The cash flow points, tariffs, collections, and supply contracts are identifiable. What is required is a restructuring that converts this fragmented exposure into a single, investable framework with defined rights, enforcement mechanisms, and aligned incentives. This transition does not require a reinvention of the regulatory framework. Existing provisions under the Electricity Act 2023, particularly the broad licensing and market design powers of NERC, alongside the transitional role of NBET Plc, provide a workable pathway to restructure settlement arrangements and introduce a commercially managed counterparty.

Nigeria does not suffer from a lack of structures, but from too many weak ones. The objective is not to add another layer, but to replace and consolidate a fragmented settlement system into one that works.

Importantly, this structure is not limited to resolving legacy debt. If designed correctly, it can evolve into a standing market platform, supporting gas supply coordination, forward pricing, and settlement across both the national grid and emerging state-level electricity markets. This creates a pathway where immediate stabilisation also lays the foundation for a more functional and investable power market.

Importantly, this is not another bailout. It is a reallocation of risk to actors whose returns depend on resolving it.

Nigeria has already absorbed these losses. The question now is whether it continues to carry them or allows the market to restructure and manage them. This can be initiated through a structured transition, where government, having already validated these obligations, invites private capital to step in as the managing counterparty, replacing further reliance on public balance sheet solutions.

Nigeria does not lack capital. It lacks structures that allow capital to operate with discipline. Until these changes, interventions will continue to stabilise the system intermittently. But gas will keep flowing, just not to where it is most needed.

•Monica Maduekwe is the Founder of Puttru Technologies, where she leads the structuring of energy investment opportunities and market-driven solutions in the power sector. Her work focuses on bridging the gap between policy design and commercial execution, particularly in emerging markets. She writes on the structural drivers of energy system performance and develops practical frameworks for unlocking capital and restoring market discipline in complex environments.

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