• Govt promises to settle N1.7tr debt in 25 days
The financial crisis facing Nigerian Electricity Supply Industry (NESI) has worsened following the payment of a paltry 4.68 per cent of invoices sent in by power Generation Companies (GenCos) for power supplied to the national grid in March 2024.
It was gathered, yesterday, that out of the total invoices worth about N270 billion sent to Nigeria Bulk Electricity Trading Plc, (NBET), for electricity supplied to the national grid, GenCos were paid 4.6 per cent each, amounting to about N12.6 billion in total for the March payment cycle.
The generation companies also received nine and 10 per cent of invoices sent in for January and February 2024, respectively.
Checks on data provided by the Nigerian Electricity Regulatory Commission showed that DisCos collected a total of N100.44 billion in March 2024 out of the N126.56 billion bills sent to customers.
NERC, in its commercial performance fact sheets of distribution companies, reported that the DisCos collected N292.71 billion in the first three months of 2024.
Power generation companies’ owners have in the past three weeks raised alarm over the deteriorating financial status of the companies following a huge N1.3 trillion debt from the market.
They claimed that they were holding the short end of the stick as they received the least attention when payments were made in the market.
The GenCos, in a statement by Board Chairman, Col. Sani Bello (rtd), observed that power generated by GenCos had continued to be consumed in full without corresponding full payment, notwithstanding the commencement of the Partial Activation of Contracts in the NESI, which took effect from July 1, 2022, the minimum remittance order, bilateral market declaration, waterfall arrangement, the risks of inflation, forex volatility with no dedicated window to cushion the effect of the forex impact, the supplementary MYTO order, which leaves about 90 per cent of GenCos monthly invoices unmet without a bankable securitisation, or financing plan. “This situation has dire consequences for the GenCos and, by extension, the entire power value chain.”
Bello, who noted that the GenCos were being owed N3.7 trillion, stated that GenCos liquidity challenges “is further worsened by the various policies introduced such as the payment waterfall in the NESI, which deprioritised payment to GenCos”.
Also, the Chairman of Transnational Corporation (Transcorp Plc), Mr Tony Elumelu, has said that the GenCos could not continue to subsidise the power supply in the country.
He, therefore, urged the Federal Government to, as a matter of urgency, settle the debt owed to the power generation companies in Nigeria to avert the collapse of the sector.
He explained that Transcorp Power alone was owed about N250 billion for power supplied to the national grid.
MEANWHILE, Federal Government has announced plans to settle an outstanding debt of N1.7 trillion owed to Generation Companies (GenCos) within 25 days.
This move comes after months of pressure from the power generation companies, who have threatened to halt operations due to unpaid invoices.
In the Accelerated Stabilisation and Advancement Plan (ASAP), presented by Minister for Finance, Wale Edun, the government said it would “develop and commence implementation of a robust and achievable plan for the resolution of the N1.7 trillion sector liquidity issue by end of June 2024”.
