The Federal Government has been reported to underpay generation companies (GenCos) by over N30billion every month for their services.
The Executive Secretary, Association of Power Generation Companies (APGC), Dr. Joy Ogaji, has called on the government’s ministries, departments and agencies (MDAs) to pay up their debts to the Power sector and also make it a point to make their future payments promptly. She said that it would help improve the sector’s liquidity.
“The government should ensure that there is payment guarantee, no more shortfalls in payment. It is imperative to state here that the investment on generation is at the instance of the off-taker (Nigerian Bulk Electricity Trading Plc, NBET) a Federal Government’s owned public liability company.
“Due to high market liquidity squeeze, GenCos including the thermal and hydro plants lack the necessary funding for their operations, acquiring spare parts and equipment and meeting other obligations for the power generation stations.
“Market payment statistics shows that on a monthly basis, generation companies’ invoices amount to about N35 billion to N40billion, out of which only about N7billion is paid. The implication is that the debt profile of the GenCos is about N30billion per month with no plans in place to clear these and put a sustainable solution for the sector.
“We have been given unfulfilled promises of ‘government is working out a solution’ without a timeline and fulfillment. We are all on life support and could be dead any moment from now, she said.”