GenCos Seeks N4trn Debt Payment from FG, Others, Threaten Shutdown
The power generation companies (GenCos), have appealed to the federal government and stakeholders in the power sector to settle the more than N4 trillion debt owed them for electricity generated.
Col. Sani Bello (rtd), the chairman of the Board of Trustees of the Association of Power Generation Companies (APGC), said this in a statement in Abuja on Monday.
Presently, the country has 23 power-generating plants connected to the national grid. Bello said that GenCos were currently owed N2 trillion for power supplied in 2024 and N1.9 trillion in legacy debt.
” GenCos are currently being owed about N4 trillion, N2 trillion for 2024 and N1.9 trillion for invoices unmet without a bankable securitisation or financing plan, ”he said.
According to him, the cash liquidity is currently threatening the continued operation of their power generating plants. He said that besides being owed huge debts, the GenCos were also operating under very harsh monetary and fiscal conditions.
“It is no more news that the GenCos have continued to bear the brunt of the liquidity crisis in the Nigerian Electricity Supply Industry (NESI).
”GenCos on their part as responsible investors with patriotic zeal have made large-scale investments and have continued to demonstrate absolute commitment by ramping capacities in line with their contract for over 10 years.
” This is amid system constraints, policies and regulations that are not investors friendly, increasing debts owed.
“Notwithstanding this and other severe difficulties the GenCos have battled with since takeover in 2013, they have kept to the terms of their contractual agreements by ramping up capacity which has been largely constrained systemically,” he said.
Bello said that against the backdrop of the many challenges facing the power sector in Nigeria, the crises from cash liquidity are on the top burner and this had reduced GenCos ability to continue to perform their obligations.
He said that the GenCos expectations of being settled through external support had also been dampened due to other market participants’ inability to meet their respective distribution linked indicators (DLIs), enshrined in the Power Sector Recovery Programme (PSRP).
Bello also said that access to forex was a problem, given that major operation and maintenance needs in the generation sub-sector were dollarised, adding that the importance of a specialised window or stable dollar allocation option for the GenCos could not be over emphasised.
“GenCos are of the position that there is the need for a coordinated approach by all stakeholders in the NESI to address the liquidity issue realistically and sustainably in the power sector.
”So that Nigerians can have access to reliable electricity supply,” he said.
Bello said that the GenCos urged that immediate and expedited action be taken to prevent the failure to sustain steady generation of electricity to Nigerians.
He said that the GenCos were also demanding an investors focused and economy growth friendly policies and regulations to incentivise investors, from monitoring and implementation and liberalisation of the market through bilateral arrangement.
According to him, such bilateral arrangement will create market confidence and ensure the viability and credit worthiness of the power sector.
He said it would also ensure full effectiveness of all market agreements, firm monitoring, and enforcement of the rules by the regulator on all market participants.
