Power Situation Worsening Because We Are Owed This Amount – Generation Companies
Generation Companies says Power Situation Worsening Because We Are Owed This Amount
The Association of Power Generation Companies (APGC) has explained that the power supply situation in the country is worsening because they are being owed N1.644 trillion since 2013.
The group’s Executive Secretary, Joy Ogaji, in a briefing in Abuja on Sunday, said a situation where the energy dispatched by the power generators was used as an index for power generation capacity was detrimental to their survival, This Day reports.
She said, “We are currently owed N1.644 trillion. One of the reasons that the power plants are down is due to inefficient management of the grid.”
According to her, the Gencos have exhausted all their borrowing sources, as the Central Bank of Nigeria (CBN) warned the banks to desist from lending money to them.
She stated, “If you give us gas, provide forex to carry out maintenance. I have told you most of the units are down and they need money to fix them.
“Give us enough money to pay our gas suppliers because it is pre-payment. But for power, it is ‘take and pay later’. There is no way that this misalignment will help us.”
As of now, according to Ogaji, the Gencos were generating an average of 4,000MW.
However, the debt claim by the Gencos has been debunked by the Nigerian Bulk Electricity Trading Company (NBET). NBET disputed the figures quoted by the power generators, saying only companies with active gas supply and transportation contracts are paid for unutilised capacity.
The Head, Corporate Communication, NBET, Henrietta Ighomrore, explained that in the country, only five power generation companies with active Gas Purchase Agreement (GPA) were entitled to be paid for unused capacity.
She said claims that the Gencos have the capacity to generate 9,000MW are not accurate, as inspections by NBET had shown that the so-called capacity does not exist.
She argued that the Gencos had always been paid as and when due, explaining that in the last payment cycle alone, the Gencos were paid N38 billion for electricity distributed on the grid.
According to her, NBET has paid the Gencos over 90 per cent of their invoices. She noted that the company paid the generators almost immediately remittances from the Discos were received.
However, Ogaji insisted that the illiquidity caused by the huge sums owed the Gencos by NBET had continued to frustrate them and render them incapable of meeting their obligations.
Such obligations, she said, included Operations and Maintenance (O&M) as and when due, procurement of critical capital, spare parts and accessories, payment, and servicing of existing loans from lenders and financiers and employee- obligations.
Such obligations, she said, included Operations and Maintenance (O&M) as and when due, procurement of critical capital, spare parts and accessories, payment, and servicing of existing loans from lenders and financiers and employee- obligations.
Ogaji listed foreign exchange as another challenge faced by the hydroelectric power plants, whose concession fees, she maintained were “dollarised.”
She said most of the electricity generated in Nigeria came from gas-fired turbines, explaining that Gencos have consistently been dealing with unending gas-related challenges, which inhibit optimal generation.
According to her, issues of gas volume, gas quality, gas pressure and gas transportation have consistently curtailed capacity utilisation by Gencos thereby affecting generation.
Ogaji stated, “Unfortunately, the unenforceable state of the contracts in the NESI and the broken cycle of payment assurance has made the enforcement of what would ordinarily be basic obligations of parties to the industry agreements, impossible.
“Since 2013 when the power sector was partially privatised till date, weak and inadequate infrastructure (transmission and distribution) have continued to render inconsequential, a significant portion of the generation capacities recovered or added by Gencos through huge investments done by them to increase their respective generation capacities.”
According to her, while the owners of the Gencos invested and increased generation capacity up to 13,000MW across the country, no corresponding investment and improvement was made at the transmission and distribution ends. The result, she said, was the significant stranded capacity of Gencos.
Generation Companies
