By BENJAMIN ORISEMEKE, Abuja –
The Power Generation Companies (GENCOS), Wednesday, disclosed that they cannot meet their gas obligations owing to the Nigeria Bulk Electricity Trading Plc. (NBET’s) indebtedness.
To this end, they declared that the situation was responsible for the shutdown of gas supply to the thermal, which had resulted in the total blackouts across the country.
GenCos at the weekend alleged that the Nigerian Bulk Electricity Trading (NBET) owed them over N1.644 trillion being the debts for the stranded or unutilized power since 2015 till date.
The Executive Secretary of the Association of Power Generation Companies (APGC), Dr. Joy Ogaji, who dropped the hint at a press conference in Abuja, said the development had affected the smooth operations of the GENCOs.
But NBET disputed the figures quoted by the GenCos, saying that only companies with active gas supply and transportation contracts were paid for unutilized capacity.
The Head Corporate Communication, NBET, Henrietta Ighomrore, had explained that in the country only five power generation companies with active Gas Purchase Agreement were paid for unused capacity.
In a new twist, the power generating companies in a statement in Abuja, also alleged that the indebtedness of the bulk trader to them and the ‘misalignment of receivable and payable days’, had aggravated the liquidity challenge faced by them.
“The indebtedness of the bulk trader to GenCos as well as the misalignment of receivable and payable days, has aggravated the liquidity challenge faced by the generation companies and underscored the need for working capital loan for most of them. Furthermore, the GenCos are operating under very harsh monetary and fiscal conditions, occasioned by the economic realities that face the country today.
“Consequently, the GenCos are unable to meet their gas obligations which accounts for the shutdown of gas supply to the thermal GenCos without payment. A preliminary review shows that GenCos are losing billions of naira every month from actions of other market participants and government parties. Idle generation represents capital investment not able to yield revenue that will hence impact the ability of the GenCos to support efficient operations and service loans used in developing the power plants.
“The central focus of a generation investor’s expectation is that the capacity will be optimally utilized to ensure the realization of calculated/expected returns on investments’’, the statement stated.
They also faulted the payment claims by NBET, saying that the claim was devoid of the true picture of the realities of the Generation Companies in the NESI, and capable of misleading the numerous consumers and stakeholders who deserve to know the truth.
“This is because, a perusal of their response shows that NBET never said anything about their payment details, from 2015 till 2017. We also believe that NBET is deliberately redirecting the focus from its inability to carry out its obligations which has thrown the GenCos in a financial quagmire, by focusing its insistence on the payments from the PAF’, the GENCOS said.
