Power Generation Companies (GenCos) in Nigeria under the aegis of Association of Power Generation Companies (APGC) have alleged gross lack of transparency in Nigeria Electricity Supply Industry (NESI) and lack of commensurate investment in transmission and distribution infrastructure necessary to take off power generated to the end users.
They further attributed the current epileptic power supply nationwide to the management of the grid which imposes sudden start and stop operations on power plants over 365 days, adding that this has damaged virtually all the generating machines culminating into their not operating in optimal capacities.
The Executive Secretary of the APGC, Dr. (Mrs) Joy Ogaji, spoke in defense of the power generation companies in a press conference.
She claimed that “since 2013, when the power sector was partially privatized 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.
“While the owners of the GenCos
invested commitedly 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 was the significant
stranded capacity of GenCos, which ironically, Nigerians are in dire need of but
cannot get”
She further alleged that the Federal government is owing the GenCos backlog of payments which are in various categories, adding that it doesn’t make sense for the government to ignore the arrears of indebtedness to GenCos.
She said that the GenCos have exhausted their line of borrowing windows which had been facilitating their operations before now.
She said if the government can make all the payments owed to the GenCos, provide easy access to foreign exchange to enable the GenCos repair the plants that are down, buy gas, and meet obligations to their respective staff, that the GenCos could generate up to 9,000 MW daily.
She revealed that to date, the GenCos are being owed unpaid available capacity amounting to the sum of N1.644trillion.
According to Dr. Ogaji, “GenCos have been under the excruciating impact of several factors but have in
an uncommon show of patriotism and resilience continued to generate power
to meet the genuine yearnings of Nigerians as well as support the stated
objectives of the Federal Government to make sustainable electricity available
to Nigerians.
“Illiquidity, caused by the huge sums owed GenCos by the Nigerian Bulk
Electricity Trading Plc (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 (FX) 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.”
Further Dr. Ogaji called for urgent meeting of all stakeholders in the power sector with the Federal government to deliberate, resolve all frustrating issues and find lasting solutions on way forward.
However, in a swift reaction, the Nigeria Bulk Electricity Trading Plc (NBET) said
“The situation in the Power Sector right now is not one for name calling or blame game, neither is it one for fictitious data reporting.
“As you are well aware, the Federal Government via NBET has continued to deploy innovative solutions aimed at sustaining sufficient cash flow within the Power Sector especially payments to the Gencos to ensure they meet their immediate obligations and continue to meet and ramp up generation to the National grid.”
