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Nigeria’s Power Supply Situation Worsening Because Gencos ‘Owed N1.6tn Since 2013’

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By Derrick Bangura

Power Generation Companies (Gencos) under the Association of Power Generation Companies (APGC) stated on Sunday that the country’s power supply situation was deteriorating because they owed over N1.6 trillion since 2013.

In a briefing in Abuja, the APGC’s Executive Secretary, Dr. Joy Ogaji, argued that a situation in which the energy dispatched by power generators was used as an index for power generation capacity was detrimental to their survival.

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The country’s already precarious power supply situation has deteriorated in recent weeks, as industry players continue to trade blame over who is to blame.
“We are currently owed N1.644 trillion. One of the reasons that the power plants are down is due to inefficient management of the grid,” Ogaji said.

According to her, the Gencos have exhausted all their borrowing sources, as the Central Bank of Nigeria (CBN) had reportedly warned the banks to desist from lending money to them.

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She stated, “If you give us gas, provide forex to carry out maintenance. I have told you most of the units are down and they need money to fix them.

“Give us enough money to pay our gas suppliers because it is pre-payment. But for power, it is take and pay later. There is no way that this misalignment will help us.”

But Ogaji stated admitted that at the moment, the Gencos were generating an average of 4,000MW.
However, the debt claim by the Gencos was immediately refuted by the Nigerian Bulk Electricity Trading Company (NBET). NBET disputed the figures quoted by the power generators, saying only companies with active gas supply and transportation contracts are paid for unutilised capacity.

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The Head, Corporate Communication, NBET, Henrietta Ighomrore, explained that in the country, only five power generation companies with active Gas Purchase Agreement (GPA) were entitled to be paid for unused capacity.

According to her, claims that the Gencos have the capacity to generate 9,000MW are not accurate, as inspections by NBET had shown that the so-called capacity does not exist.

Earlier, Ighomrore argued that the Gencos had always been paid as and when due, explaining that in the last payment cycle alone, the Gencos were paid N38 billion for electricity distributed on the grid.

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According to her, NBET has paid the Gencos over 90 per cent of their invoices. She noted that the company paid the generators almost immediately remittances from the Discos were received.

However, Ogaji noted that the illiquidity caused by the huge sums owed the Gencos by NBET had continued to frustrate them and render them incapable of meeting their obligations.

Such obligations, she said, included Operations and Maintenance (O&M) as and when due, procurement of critical capital, spare parts and accessories, payment, and servicing of existing loans from lenders and financiers and employee- obligations.
Ogaji listed foreign exchange as another challenge faced by the hydroelectric power plants, whose concession fees, she maintained were “dollarised.”

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She said most of the electricity generated in Nigeria came from gas-fired turbines, explaining that Gencos have consistently been dealing with unending gas-related challenges, which inhibit optimal generation.

According to her, issues of gas volume, gas quality, gas pressure and gas transportation have consistently curtailed capacity utilisation by Gencos thereby affecting generation.

Ogaji stated, “Unfortunately, the unenforceable state of the contracts in the NESI and the broken cycle of payment assurance has made the enforcement of what would ordinarily be basic obligations of parties to the industry agreements, impossible.

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“Since 2013 when the power sector was partially privatised till date, weak and inadequate infrastructure (transmission and distribution) have continued to render inconsequential, a significant portion of the generation capacities recovered or added by Gencos through huge investments done by them to increase their respective generation capacities.”

According to her, while the owners of the Gencos invested and increased generation capacity up to 13,000MW across the country, no corresponding investment and improvement was made at the transmission and distribution ends. The result, she said, was the significant stranded capacity of Gencos.

Ogaji added, “The persistence of this anomaly over these years, compelled Gencos to begin to question the commercial reasonability of continued investment in recovery or expansion of generation capacity that would end up being stranded and not utilised to transmit and distribute electricity to end users who are yearning for same.”

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She said the foundational agreements, which Gencos were told existed before, no longer exists, after they had commenced performance, with dire implication for power generators.

Ogaji stated, “We should address the root cause and not the symptoms, for sustainability of the NESI and the power sector.
“The current state of the national grid must be addressed, otherwise we will continue to always deny Nigerians their legitimate expectation of unhindered rights to reliable supply of electricity.”
THISDAY investigated and discovered that all of the parties’ positions were not entirely accurate. To begin with, it is incorrect to assert that only five generation companies have gas supply agreements, implying that there is no level playing field. Further investigation revealed that the Gencos were owed not only capacity charges, but also interest and energy charges – the value of which has yet to be determined. Furthermore, the forex issue affects not only hydroelectric plants, but also gas-fired and thermal plants.
In addition, the Transmission Company of Nigeria (TCN) is performing maintenance on their lines. Furthermore, many gas companies were performing maintenance on their infrastructure, limiting gas supply to generation companies. All of this combined to make the country’s power supply erratic.

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Headlines

NNPC Foundation Trains Over 3,000 Southwest Farmers in Climate-Smart Agriculture

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In a bid to promote food security and sustainable agricultural practices, the NNPC Foundation has successfully trained more than 3,000 farmers in the South-West geopolitical zone on climate-smart and modern farming techniques.

The training, which concluded on Friday in Ikorodu, Lagos, marked the end of the Southwest phase of the foundation’s pilot programme aimed at empowering local farmers and boosting agro-productivity.

Speaking at the closing ceremony, Managing Director of the NNPC Foundation, Mrs. Emmanuella Arukwe, described the initiative as a milestone in the lives of thousands of farmers.

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“Today marks the formal conclusion of the first phase of a national journey that speaks to resilience, food security, and economic empowerment,” Arukwe said.
“What began as a bold decision to support small holder farmers has translated into tangible action across three geopolitical zones (South-East, South-South, and South-West) in Southern Nigeria.”

She disclosed that a total of 3,860 vulnerable farmers across 10 locations in the three regions were trained in sustainable farming practices that improve productivity and market access.

“This achievement is not just a number, but a milestone in the lives of real people and real communities. We were able to strengthen farmers’ capacity to adapt to climate change,” she added.
“Through the training, we were able to improve access to markets, promote inclusive agriculture and especially gender representation. We also trained them on enhancing food production through sustainable techniques.”

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Arukwe noted that the programme would now move to the North-West, North-Central, and North-East zones as part of its next phase, saying the foundation is committed to supporting livelihoods nationwide.

“This is only Phase One. We will now turn our focus to the North-West, North-Central, and North-East zones. What we have achieved in the South will inform and strengthen our next steps,” she said.
“The NNPC Foundation will continue this mission, to support livelihoods, build resilience, and empower the hands that feed our families and beyond.
We have decided that most times you get a lot of requests from people asking us to give them palliatives and all kinds of things to help them.
But we think it is much better to teach people to fish than just give them fish so they can continue,” Arukwe explained.

Chairman of Ikorodu Local Government, Mr. Wasiu Adesina, while commending the initiative, urged the beneficiaries to apply the knowledge gained to boost productivity and profitability.

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“As we all know, agriculture is the bedrock of any nation. Without agriculture, there will not be a nation, because there will be no food to eat,” Adesina stated.
“It is the farmers that produce our food, and it is important that we train our farmers with new techniques in agriculture, and that is exactly what the NNPC Foundation is doing.

“To the farmers, you have to take advantage of this training and face the farming squarely. In some great countries like the United States and the United Kingdom, farmers are the most richest people in those countries.

“This is because they make a lot of money from farming. We need to inculcate that habit in Nigeria and develop ideas in farming. Even after my tenure, I am going back to farming, so, maybe I will ask the NNPC Foundation to train me so that I also join you to be a farmer.”

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He appealed to the foundation to provide further empowerment for the trained farmers to help them kickstart their agricultural ventures.

“If the farmers have land for farming, I believe the foundation will provide financial aid to keep their farms running,” Adesina added.

Also speaking at the event, the Lagos State Commissioner for Agriculture and Food Systems, Ms. Abisola Olusanya, represented by the Director of Fisheries, Mrs. Osunkoya Daisi, lauded the Foundation’s efforts in bolstering the state’s food security.

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“On behalf of the Lagos State Government, we would like to express our sincere appreciation to NNPC Foundation for training our farmers and for training all the farmers all over the country,” she said.
“Definitely, the training will help improve food production. We can see the impact of climate change effects in agriculture. I am sure farmers have been equipped with climate-smart agriculture techniques to improve production.”

The NNPC Foundation Ltd/Gte is the Corporate Social Responsibility (CSR) arm of the Nigerian National Petroleum Company (NNPC) Limited. It was incorporated in February 2023 to manage the company’s CSR initiatives and enhance Nigeria’s socio-economic development.

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Education

NUC grants ESUT full accreditation for Law, 7 other programmes

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The National Universities Commission, (NUC), has given full accreditation to the Enugu State University of Science and Technology (ESUT), for her Law programme.

According to the Public Relations Officer of ESUT, Mr Ikechukwu Ani, this is contained in a letter addressed to the institution’s Vice Chancellor, Prof. Aloysius Okolie, on Wednesday in Enugu by the NUC.

Ani said that in the letter, the Executive Secretary of NUC, Prof. Abdullahi Ribadu said the report was contained in the result of the October/November 2024 accreditation of academic programmes in Nigerian universities.

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Ani disclosed that other programmes in the institution accredited by the NUC include Master of Science in Business Management; Education Computer Science; Education Physics and Agricultural Engineering.

Other accredited programmes he said were Quantity Surveying; Urban and Regional Planning; and Applied Microbiology.

He said that the letter quoted Section 10 (1) of the Education National Minimum Standard and Establishment of Institutions, Act CAP E3, Laws of the Federation of Nigeria 2004 as empowering the NUC to lay down minimum academic standards for all academic programmes taught in Nigerian universities.

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He said the session also empowers the NUC to accredit such programmes.

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Crime

Court remands 2 over alleged attempted murder

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Court discharges man accused of burning father’s house in Abuja

An Ikeja Magistrates’ Court, Lagos, on Wednesday, remanded two persons, Olaitan Fasasi and Kehinde Tobiloba in a correctional facility over alleged attempted murder.

Fasasi, 40, and Tobiloba, 26, whose addresses were not provided, are being charged with conspiracy, attempted murder and membership of a secret society.

The Magistrate, Mr L.A Owolabi, did not take the plea of the defendants for want of jurisdiction.

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Owolabi directed the police to forward the case file to the Director of Public Prosecution for legal advice.

He thereafter adjourned the case until May 31 for mention.

The Prosecutor, Josephine Ikhayere, told the court that the defendants committed the offences at about 5.02p.m on Feb. 15, at Mushin, Lagos.

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She said that Fasasi, Tobiloba and others now at large, attempted to commit murder by shooting at a resident, Alfred Ademola.

“They armed themselves with a locally made gun. They belong to Eiye Confraternity, a group proscribed by law,”, she said.

Ikhayere said that the offences contravened Sections 230(1) and 411 of the Criminal Law of Lagos State, 2012.

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He said that the actions of the defendants also contravened Section 2(3)(a)(b)(c)(d) of the unlawful societies and Cultism Law of Lagos State Law.

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