Power generation companies (GenCos) in Nigeria have attributed low electricity generation, presently being experienced in the country, to the N1.644 trillion owed them by the Nigerian Bulk Electricity Trading Plc.
Under the aegis of the Association of Power Generation Companies (APGC), they said the amount came as a result of unused capacity dating back to 2015.
Speaking to journalists in Abuja on Sunday,, APGC Executive Secretary, Dr. Joy Ogaji accused NBET of failing in its obligations to the GenCos as contained in the Power Purchase Agreements (PPA).
Ogaji who gave a breakdown of the debts, said NBET owed the GenCos 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.
Dr. Ogaji who gave a breakdown of the debts, said NBET owed the GenCos 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.
According to her, the “illiquidity caused by the huge sums owed GenCos by NBET, has more than ever before continued to frustrate the GenCos and kept them incapable of meeting their obligations which are extremely necessary to keep their power plants running and make capacities available, while observing required Health, Safety and Environment (HSE) standards. Such obligations include our 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, employee obligations, etc.
“Recently, GenCos cried out to the authorities and are still looking forward to a favourable consideration of their pleas for foreign exchange support to enable them to procure critical spares for their turbines and equipment to keep them in good state of repair. This is in addition to the FX challenges faced by the Hydros, whose concession fees are dollarized”.
She added: “Most of the electricity generated in Nigeria, about 80 percent, come from gas-fired turbines. Natural gas is the feedstock or fuel of these plants. GenCos have consistently been dealing with unending gas-related challenges which inhibit optimal generation. Issues of gas volume, gas quality, gas pressure and gas transportation have consistently curtailed capacity utilization by GenCos thereby affecting generation.
“These issues need to be addressed and urgently too, as the GenCos have always requested. Unfortunately, the unenforceable state of the contracts in the NESI (Nigerian Electricity Supply Industry) and the broken cycle of payment assurance have made the enforcement of what would ordinarily be basic obligations of parties to the industry agreements, impossible”.