The liquidity crisis that has engulfed the power sector may be heading for the worst as debts owed the GENCOs has now hit N460 billion.
The Executive Secretary, Association of power Generation Companies (APGC), Dr (Mrs) Joy Ogaji, who disclosed this to LEADERSHIP at the end of a function held in Abuja recently, courtesy Nextier Capital Ltd, titled: “Addressing the Liquidity Challenges from the Supply Side of the Nigerian Electricity Market”, regretted its negative impact on the generating capacity of the power sub-sector, noting that something needed to be done in the short term to move the industry forward.
On the drop in power supply which some DISCOs have attributed to low generation, Dr Ogali said the problem is due to insufficient fund for the GENCOs to generate at full capacity.
She said: “The GENCOs have over 12, 000 mega watts (MWs) and can generate over 7, 000MWs of electricity, but have not enough funds to meet up due to lack of payment by the DISCOs for power sold to them.
“Recently, we gave 100 per cent power to the DISCOs, and they only ended up paying us 23 per cent of the money. That has been the trend for a while now. So we are helpless; we can’t buy gas. The gas companies who have adopted a ‘pay-before-service rule are shutting down the power plants.
‘‘And if we don’t have the gas, there is no way we can generate electricity. It is like wanting your generator to work without putting petrol in it. We can’t even maintain our turbines adequately for optimal generation. As I speak to you today, we are being owed N460 billion.”
While it appears that some stakeholders in the industry may have been angling the option of government subsidy as a way out of the crisis, Dr Ogaji rejected the call outrightly.
She said: “ I think our experience with subsidy in the petroleum sector should be a lesson to us. We all saw how the system was hijacked by cabals to exploit Nigerians.”
According to her, instead of thinking subsidy, we should be talking about incentives for the operators.
“Take the issue of the unstable exchange rate for instance. Government could come up with policies that will ensure that the effect of rise in dollar value is reduced to the barest minimum in the system by ensuring that the prevailing value is not brought to bear, as the case may be, in what is paid for gas for instance.
She however said the GENCOs will continue to do their best with the limited resources at their disposal to ensure that there is power for Nigerians, calling on operators in the industry who might be constituting the weakest link to improve on their productions.
However, the Chief Consulting partner,Transmission Company of Nigeria (TCN), Engr Akin Bada, disagreed with those who see the solution to power problem in the country in privatisation of TCN.