By SUNDAY ABBA, Abuja
Nigeria may be thrown into darkness in the coming week as the power generation companies, GenCos, have threatened to shut down their power plants over unpaid debts.
Confirming this development to the Guardian, the Executive Secretary of the Association of Power Generation Companies, GenCos, Dr Joy Ogaji, said over 90 per cent of the invoices by the power companies had not been paid.
However, it was learnt that the reduced payment was occasioned by delay in securing the budgetary top-up payment for tariff shortfall under the 2023 appropriation.
Sources familiar with the development also hinted that the Federal Government was expected to release the fund to NBET by next week. This is coming despite an agreement between the Nigerian Electricity Regulatory Commission (NERC) and the Distribution Companies (DisCos) mandating the utility companies to comply with a remittance threshold.
While the All Progressives Congress (APC)-led government has for over seven years spoon-fed the sector with subsidies in form of tariff shortfall instead of liberalising the market and subjecting it to the market forces of demand and supply, electricity tariff was increased in 2021 and has maintained a rise every six months with another review due three days after President Muhammadu hands over power to a new government.
With the threat coming from the upstream operators in the sector, there are indications that tariff increase did not improve the financial crisis in the sector as
It was gathered that most of the DisCos were at the verge of bankruptcy with none recording profit since the sector was privatised in 2013.
Ogaji said that plants were “shutting down because they are unable to meet their obligations and still keep their machines on the grid.”Yearly invoices by the GenCos hovered around N400 billion going by statistics from the Nigerian Bulk Electricity Trading Company (NBET). If the claims of the GenCos are anything to take serious, over N300 billion of electricity invoices in the country are not settled.
Ogaji said the foreign exchange crisis in the country and ramping down of power generating machines have downed some power plants and pushed maintenance cost of electricity GenCos to about $4.78 billion.
Nigeria’s exchange rate has risen by about 300 per cent from the rate in 2013 when the power sector was privatised. The GenCos noted that unless the companies have special windows to access foreign exchange at official price, yearly maintenance of equipment and other dollar denominated obligations may continue to threaten electricity supply in the country.