Nigerian Bulk Electricity Trading Plc, NBET weekend said it has paid N186.7billion to Electricity Generating Companies GENCOs saying it is only owing them about N156 billion.
Reacting to the alarm raised by GENCOs that their continued existence is being threatened by huge unpaid debt by various stakeholders and that they are currently running their operations at a huge loss; and are barely struggling to survive, General Manager/Head, Power Procurement and Power Contracts, Nigerian Bulk Electricity Trading Plc, NBET, Longe Yesufu Alonge, said the company has made payment of N186, 556, 636, 647 from February 2015 to April 2016, while the outstanding payment to the GENCOs from February 2015to April 2016 is N155, 768, 549, 056. He said that “the payment performance of NBET from February 2015 to April 2016 is 54.50 percent not the average of 40 per cent being claimed by the GENCOs. He also said that NBET has paid the sum of N21billion from its capitalisation to reduce the debt it owes the GENCOs. He explained that the company has not paid the outstanding due to the challenges in the power sector. Reacting to the same issue, an official of the Central Bank of Nigeria, who does not want his name in print, said that the power intervention fund has terms and conditions attached to it. He said that any GENCOs which meets the terms and conditions of the facility have due access to draw from the fund. He said that some of the GENCOs think that the fund is a national cake to be shared. He said that the last draw down from the fund some of the GENCOs did not benefit because they failed to meet the necessary conditions. He equally said that some of the GENCOs just wanted free funds which is not possible anywhere. The Power Generating Companies weekend said that unless something urgent is done in the next couple of months, Nigeria should be prepared for a total electricity blackout. They said that they are currently running their operations at a huge loss and are barely struggling to survive. The GENCOs, in a report, blamed their woes on the huge debt, valued at about N140 billion, owed them by some government agencies and some other companies; the declining value of the naira against major international currencies; insecurity and vandalism of gas and power assets in the Niger Delta; shortage in gas supply; low tariffs and absence of critical infrastructure to support power generation. They said that the combined effect of these would render the GENCOs and their investors incapable of delivering power despite their willingness and readiness to so do. They disclosed that this is leading to a situation where total seizure of operations by GENCOs is imminent. “The GENCOs now have very limited options: to either shut down operations proactively or be compelled to do so by the current state of affairs in the power sector. “Much as the GENCOs remain committed to deliver on their power generation commitments, if the issues listed below are not resolved within the next few days, an elongated system collapse will be inevitable,” the GENCOs warned. However from the document sighted by Financial Vanguard, the lingering epileptic power supply in the country is as a result of cumulative stranded capacity from the GENCOs, which they record daily. According to the GENCOs’ document, “Several efforts have been made to mitigate these stranded capacities to the barest minimum, but thus far all efforts have been in vain, as the capacity tends to increase rather than decrease. Out of the 7,856.52 MW, available capacity in the country, only 2,804MW, can be generated, as about 4,991 MW, have been recorded as stranded capacity.” A breakdown of the powergenerating situation showed that Egbin, which is the country’s largest power station, can only deliver about 201MW, out of the 880MW available capacity, the remaining 679 MW is recorded as stranded capacity. Transcorp Power Limited, a subsidiary of Transnational Corporation of Nigeria Plc, owners and operator of Ughelli Power Plant in Warri, Delta State, have a stranded capacity of 249MW, out of the 450 MW available capacity. The data also revealed that Shiroro Power Station, a hydroelectric power plant located at Kaduna River in Niger State, is the only company that has no stranded capacity rather out of the 450 MW, available capacity, the company generate 412 MW, the remaining can be attributed to generation loss. Geregu and Sapele on the other hand are said to have a generating capacity of, 0 MW and 65 MW as well as 276MW and 55 MW stranded capacity respectively. Kainji/Jebba, it said both Hydro Power Plants in Niger state, with an available capacity of 836 MW, have a stranded capacity of 170 MW. While others have generating capacities of 1,190 MW, and stranded capacities of 3,562 MW. Furthermore, the GENCOs said, they are not talking about breaking even or making profit, which is a legitimate expectations of any investor, rather they are crying out about their continued operations at a huge loss and the absence of critically required support. They said despite their commitment, as seen by their substantial capital investments towards capacity enhancement and continued operations under the suffocating operating environment, they have continued to be stretched. “As if the intention is to know how far the GENCOs could go before shutting down operations, the response is very simple: Shut down is imminent,” they said. The GENCOs claimed they have been at the receiving end of the lapses and deficiencies in the Nigerian Power Sector, as well as the seemingly insurmountable challenges of operating within the sector.” According to them, they have been and do remain far more vulnerable than any other player in the electricity supply value chain, adding that for whatever reason, very little has been put in place to give the GENCOs a legitimate chance of survival based on the realities on ground. “While the GENCOs have been carrying the burden of ensuring that the power sector remains functional, and hoping that the obvious gaps, deficiencies and threat to their existence would be addressed, they are presently cringing under the excruciating pains of carrying this burden. Given that life is literally being snuffed out of the GENCOs, they owe all stakeholders and the generality of Nigerians the duty to cry out,” they said. The GENCOs accused the Central Bank of Nigeria of being complicit in their woes, stating that the much welcomed intervention by the Central Bank of Nigeria (CBN) to bridge the gap, between the receivables and actual receipts, had been bogged down with bureaucracy typified by long drawn processes, which have ensured that after two years of the said intervention, not much impact has been made on the power sector. As at today, the GENCOs claimed they have not received full disbursement of the intervention fund from CBN, and there is absolutely no clarity as to when remaining payment tranche will be completed. They lamented that the non-payment of the stabilisation fund as at when it was approved two years ago has impacted on its value as at today.
Reacting to the alarm raised by GENCOs that their continued existence is being threatened by huge unpaid debt by various stakeholders and that they are currently running their operations at a huge loss; and are barely struggling to survive, General Manager/Head, Power Procurement and Power Contracts, Nigerian Bulk Electricity Trading Plc, NBET, Longe Yesufu Alonge, said the company has made payment of N186, 556, 636, 647 from February 2015 to April 2016, while the outstanding payment to the GENCOs from February 2015to April 2016 is N155, 768, 549, 056. He said that “the payment performance of NBET from February 2015 to April 2016 is 54.50 percent not the average of 40 per cent being claimed by the GENCOs. He also said that NBET has paid the sum of N21billion from its capitalisation to reduce the debt it owes the GENCOs. He explained that the company has not paid the outstanding due to the challenges in the power sector. Reacting to the same issue, an official of the Central Bank of Nigeria, who does not want his name in print, said that the power intervention fund has terms and conditions attached to it. He said that any GENCOs which meets the terms and conditions of the facility have due access to draw from the fund. He said that some of the GENCOs think that the fund is a national cake to be shared. He said that the last draw down from the fund some of the GENCOs did not benefit because they failed to meet the necessary conditions. He equally said that some of the GENCOs just wanted free funds which is not possible anywhere. The Power Generating Companies weekend said that unless something urgent is done in the next couple of months, Nigeria should be prepared for a total electricity blackout. They said that they are currently running their operations at a huge loss and are barely struggling to survive. The GENCOs, in a report, blamed their woes on the huge debt, valued at about N140 billion, owed them by some government agencies and some other companies; the declining value of the naira against major international currencies; insecurity and vandalism of gas and power assets in the Niger Delta; shortage in gas supply; low tariffs and absence of critical infrastructure to support power generation. They said that the combined effect of these would render the GENCOs and their investors incapable of delivering power despite their willingness and readiness to so do. They disclosed that this is leading to a situation where total seizure of operations by GENCOs is imminent. “The GENCOs now have very limited options: to either shut down operations proactively or be compelled to do so by the current state of affairs in the power sector. “Much as the GENCOs remain committed to deliver on their power generation commitments, if the issues listed below are not resolved within the next few days, an elongated system collapse will be inevitable,” the GENCOs warned. However from the document sighted by Financial Vanguard, the lingering epileptic power supply in the country is as a result of cumulative stranded capacity from the GENCOs, which they record daily. According to the GENCOs’ document, “Several efforts have been made to mitigate these stranded capacities to the barest minimum, but thus far all efforts have been in vain, as the capacity tends to increase rather than decrease. Out of the 7,856.52 MW, available capacity in the country, only 2,804MW, can be generated, as about 4,991 MW, have been recorded as stranded capacity.” A breakdown of the powergenerating situation showed that Egbin, which is the country’s largest power station, can only deliver about 201MW, out of the 880MW available capacity, the remaining 679 MW is recorded as stranded capacity. Transcorp Power Limited, a subsidiary of Transnational Corporation of Nigeria Plc, owners and operator of Ughelli Power Plant in Warri, Delta State, have a stranded capacity of 249MW, out of the 450 MW available capacity. The data also revealed that Shiroro Power Station, a hydroelectric power plant located at Kaduna River in Niger State, is the only company that has no stranded capacity rather out of the 450 MW, available capacity, the company generate 412 MW, the remaining can be attributed to generation loss. Geregu and Sapele on the other hand are said to have a generating capacity of, 0 MW and 65 MW as well as 276MW and 55 MW stranded capacity respectively. Kainji/Jebba, it said both Hydro Power Plants in Niger state, with an available capacity of 836 MW, have a stranded capacity of 170 MW. While others have generating capacities of 1,190 MW, and stranded capacities of 3,562 MW. Furthermore, the GENCOs said, they are not talking about breaking even or making profit, which is a legitimate expectations of any investor, rather they are crying out about their continued operations at a huge loss and the absence of critically required support. They said despite their commitment, as seen by their substantial capital investments towards capacity enhancement and continued operations under the suffocating operating environment, they have continued to be stretched. “As if the intention is to know how far the GENCOs could go before shutting down operations, the response is very simple: Shut down is imminent,” they said. The GENCOs claimed they have been at the receiving end of the lapses and deficiencies in the Nigerian Power Sector, as well as the seemingly insurmountable challenges of operating within the sector.” According to them, they have been and do remain far more vulnerable than any other player in the electricity supply value chain, adding that for whatever reason, very little has been put in place to give the GENCOs a legitimate chance of survival based on the realities on ground. “While the GENCOs have been carrying the burden of ensuring that the power sector remains functional, and hoping that the obvious gaps, deficiencies and threat to their existence would be addressed, they are presently cringing under the excruciating pains of carrying this burden. Given that life is literally being snuffed out of the GENCOs, they owe all stakeholders and the generality of Nigerians the duty to cry out,” they said. The GENCOs accused the Central Bank of Nigeria of being complicit in their woes, stating that the much welcomed intervention by the Central Bank of Nigeria (CBN) to bridge the gap, between the receivables and actual receipts, had been bogged down with bureaucracy typified by long drawn processes, which have ensured that after two years of the said intervention, not much impact has been made on the power sector. As at today, the GENCOs claimed they have not received full disbursement of the intervention fund from CBN, and there is absolutely no clarity as to when remaining payment tranche will be completed. They lamented that the non-payment of the stabilisation fund as at when it was approved two years ago has impacted on its value as at today.
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