GenCos, NERC Yet To Pay $27m Gas Debt, Says Seplat

Seplat Energy said that it is owed $27m an equivalent of (N19.17bn or N11.25bn) for gas supplied to power generation companies (GenCos) in Nigeria, a document seen by THE WHISTLER revealed.

The debt is part of gas contracts signed between the Nigerian Electricity Regulatory Commission, GenCos and gas companies.

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Nigeria has 28 electricity generation companies (GenCos) out of which only three are hydro — Shiroro, Kainji and Jebba.

By implication, 25 GenCos rely on constant supply of gas to produce electricity.

Power supply has been down to less than the 4,000MW, while the national grid has already collapsed six times.

The state of electricity generation in the country was blamed on the N1.644trn owed GenCos by the Nigerian Bulk Electricity Trading (NBET) Plc. The debt is as a result of unpaid capacity charges since 2015.

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This has made it difficult for GenCos to in turn pay for gas supplied to them by gas companies.

Seplat said, “To secure the sustainability of gas supply to the Generation Companies (Gencos), the Nigerian Electricity Regulatory Commission (NERC) has established a pathway to reactivate partial securitisation of Gas Contracts for the Nigerian Electricity Supply Industry.

“The commission facilitated contractual agreements between the generation, transmission, and distribution companies to guarantee a daily average of 5,000 MW of electricity to consumers.

“The order, which became effective on 1 July 2022, proposes a payment waterfall to address the current issue of the non-collection of full revenue for gas sales for Domestic Gas Delivery Obligation (DGDO Customers).

“In addition, the order gives the gas suppliers and gas transporters priority over the Gencos in terms of payments. This is a positive development that will guarantee offtake, improve revenue collection and reduce trade receivables, which currently stands at $27m for the Company’s existing DGDO GSAs.”

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