Nationwide Blackout Looms Over N601b Debt, GenCos Warns
Electricity Generation Companies (GenCos) are warning of a nationwide imminent blackout if the N601 billion debts owed them by consumers are not paid.
Expressing their frustrations on Tuesday at the Nigeria Power Summit, part of the ongoing Nigeria Oil and Gas Conference (NOG) holding in Abuja, warned that they could no longer guarantee generation when less than 20 percent of cost of power production was being paid for.
The Managing Director and Chief Executive Officer of Mainstream Energy Solutions Limited, Mr. LamuAudu, stated that only 20 percent of the cost of power produced across the supply value chain is being paid for.
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According to him, accessing foreign exchange (forex) remains a huge challenge for them as a result of inconsistent exchange rates, which was less than N200 to a dollar when the power assets were bought, and currently above N350.
“Virtually all the spare parts used in the power sector are imported and we need foreign exchange to procure them. But, unfortunately, the fluctuating exchange rate has made planning difficult for investors,” Audu said.
He further noted that transmission infrastructure were aging, which most time leads to rejection of generated power by the Transmission Company of Nigeria (TCN).
“This is a major loss on the part of power generation companies. When the generated power is rejected, who bears the loss? I think government should be in a position to pay for this. And going forward, I think TCN should be privatised,” he advised.
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Also the Managing Director of Sahara Power, Mr. Kola Adesina, lamented about the paucity of funds for power investors.
He noted that lack of fund remains a stumbling block to the growth of the sector, adding that power sector being a cycle feeds from four sources; gas, generation, transmission and distribution.
Adesina said when one leg of the cycle is stifled of fund, all other segments are affected from functioning at optimal level.
According to him, the inability of consumers to pay for power consumed ultimately affects payment to gas producers, GenCos and the transmission company.
He also noted that lack of adequate gas supply to the generating companies is also a major issue hindering the smooth operation of the sector, adding that constant attacks on gas infrastructure by agitators remains an issue that government must address for the sector to move forward.
