Bulk trader, others owe power generation firms N140bn

Electricity generation firms in the country have put the debts owed them by the Nigeria Bulk Electricity Trading Plc and other industry stakeholders at over N140bn.

The Gencos said from the pre-transitional stage of the electricity market till date, the outstanding payments being carried in their books had consistently been on the increase.

The amounts owed to Egbin Power Plc, Transcorp Ughelli Power Limited, Shiroro Power Station, Geregu Power Plc, Kainji/Jebba power stations and Sapele Power Plc were put at N68.71bn, N28.29bn, N9.66bn, N7.98bn, N20.94bn and N9.9bn, respectively.

The firms stated in a report, “The verified amounts invoiced by the Gencos are required to be guaranteed and paid by the NBET. The trend of payment from the NBET to the Gencos has been very poor.”

They said the intervention by the Central Bank of Nigeria to bridge the gap between the receivables and actual receipts had been “bogged down in bureaucracy typified by long-drawn processes, which have ensured that after two years of the said intervention, not much impact has been made on the power sector.”

The power firms said they had not received full disbursement of the intervention fund from the CBN, and that there was absolutely no clarity as to when the remaining payment tranche would be completed.

The report added, “The non-payment of the stabilisation fund when it was approved two years ago has impacted on its value as of today.

“While the Gencos have been carrying the burden of ensuring that the power sector remains functional and hoping that the obvious gaps, deficiencies and threat to their existence would be addressed, they are presently cringing under the excruciating pains of carrying this burden.”

The power firms said they had continued to operate at “a huge loss,” decrying what they described as “the absence of critically required support.”

They said, “The combined effect of these will render the Gencos and their investors incapable of delivering power, despite their willingness and readiness to so do. This is leading to a situation where total seizure of operations by the Gencos is imminent. The Gencos now have very limited options: To either shut down operations proactively or be compelled to do so by the current state of affairs in the power sector.

“While the Gencos remain committed to the Nigerian project, this commitment can only be meaningful when the critical factors necessary for the continued existence and thriving of the Gencos and the power sector are addressed and fixed. It is extremely urgent that this is done now.”

Meanwhile, the Federal Government on Thursday said it had been able to access N147.26bn as partial risk guarantee for the Nigerian Bulk Electricity Trading Company Plc and for the upgrade of the country’s power transmission grid.

It stated that the fund was part of measures aimed at addressing the infrastructural decay that had slowed sustainable growth across the country for several years, adding that the country’s power generation capacity would be over 6,000 megawatts by the end of this year.

The total power generation as of 6am on Thursday was 2,751.2MW.

The Minister of Power, Works and Housing, Babatunde Fashola, disclosed this when he met with a delegation from the International Monetary Fund in Abuja.

Fashola, who was represented by the Minister of State for Power, Works and Housing, Mustapha Baba-Shehuri, stated that a financial support loan agreement in the sum of $273m (N84.99bn at CBN’s rate of N311.35 to a dollar) had been earmarked for the NBET as partial risk guarantee for the off-taker.

The minister, according to a statement issued by the Director of Press, Federal Ministry of Power, Mr. Timothy Oyedeji, also noted that another $200m (N62.27bn) from the African Development Bank for grid upgrade plan had been concluded for the Transmission Company of Nigeria.

Fashola told his guests that Nigeria was seriously challenged by the lack of adequate infrastructure due to endemic corruption.

He stated that the government would tackle the rot in the power sector through a holistic approach as contained in the recently unveiled Road Map to Power, adding that the document contained timelines for planned activities as well as deliverables for the industry.

“We are expecting that at end of the year, our generation capacity will be over 6,000MW; 10,000MW in 2019; and 30,000MW in 2030,” he said.