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GenCos Debt Profile Hits N2 Trillion

The Association of Power Generation Companies (APGC) has raised the alarm over the spike of  its members indebtedness now estimated at  about N2 trillion by the Nigerian Bulk Electricity Trading (NBET) PlC.

Executive Secretary of APGC, Dr. Joy Ogaji, stated this yesterday, at the power session of the 2022 Association of Energy Correspondents of Nigeria (NAEC) Strategic Conference.

 March this year, Ogaji had said that NBET was indebted to APGC to the tune of N1644 trillion, a figure that has grown to N2 trillion as at August 2022.

Ogaji  gave a breakdown of the debts to include N214.93 billion in 2015; N273.32 billion in 2016; N236.47 in 2017, N264.08 billion in 2018, and N256.97 billion, N266.01 billion and N120.25 billion in 2019,2020 and 2021 respectively. She said of the N2 trillion owed GenCos, N1 trillion of the amount is to be paid to gas suppliers.

The APGC boss said the inability of the transmission arm of the power sector value chain to transmit power generated by the sector was a major disservice to the industry.

On the other hand, she said a situation where electricity generated is not taken will led to a gradual collapse of the sector.

“For instance, if you continue to produce a product without a demand for such, it will get to a time that you will be discouraged from producing anymore and that will lead to a collapse.”

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He said at the inception of the of the privatisation exercise,most Gencos took acquisition loan at N155/Dollar but today it is about N700/Dollar which must be serviced at the current rate.

She lamented that about 98 per cent of the input used by Gencos are imported which makes the issue of forex pertinent.

On willing buyer, willing seller, she said the regulatory constraint was a cog in the wheel of progress for GenCos stressing that the industry regulator-Nigerian Electricity Regulatory Commission (NERC) peg on not more that 60MW dedicated to that policy is not helpful.

With this regulation, she said the regulator has tied the legs and hands of investor because they cannot inject more than that quantum of energy even of they have the capacity to do more.

Also speaking, the Executive Director, Generation, Niger Delta Power Holding Company (NDPHC), Mr Kassim Abdullahi, lamented that NBET was equally owing the company about N150 billion for electricity generated.

Besides, he said the company had equally subsidised electricity to the tune of N1 trillion because its  tariff is 28 per cent lower than the market price.

However, he said the time to free up the grid system is now,saying the eligible customer policy of NERC to help support electricity penetration will help in this regard.

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He disclosed that NDPHC is already in talks with Discos who are ready to buy power from the company directly. 

To achieve this, he said, the cost of infrastructure is a major factor to consider because the lines to transport electricity to the Discos, industrial clusters will have to be factored into the tariff cost. With this initiative of willing buyer,willing seller he said that gas suppliers are assured of prompt payment for their services.

In the market today, if you invoice, what you get is 40 to 50 payment and that is what we get to pay the gas suppliers because we cannot pay above what we get.

Source: Sun

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