13 March 2018

Nigeria: Blackout Looms As Debts Threaten Gencos' Operations

Blackout looms across the country as huge debts continue to threaten the operations of Nigeria's power generation companies (Gencos), a new payment schedule published by the Nigerian Bulk Electricity Trading, NBET, has shown.

According to December 2017 electricity market payments published on Monday by NBET, there is about 92 per cent shortfall in the payment made to the GENCOs by NBET.

The 92 per cent payment shortfall, details of the publication revealed, showed that a mere 8.25 per cent payment was made by NBET.

The electricity market payments schedule, seen by PREMIUM TIMES, showed that 25 Genco invoices for December 2017 amounted to N54,242,749,563.22 (N54 billion) while payment made was N4,476,404,925.21 (N4.5 billion), representing 8.25 per cent of total bill.

In the advertorial, the NBET, however, explained that the payments made to Gencos were computed-based on the money received from the Distribution companies (Discos).

The electricity trading company said that it received late payment for the December 2017 cycle from some Discos.

It listed the affected Discos to include Abuja, Benin, Enugu and Port Harcourt Discos which paid NBET N4.47 billion for the December invoices of N50.21 billion representing 8.91 per cent.

GENCOs have in recent time raised alarm over liquidity and the going concern of its companies, due to huge debt.

The companies also decried the poor payment it receives from the NBET, saying many of the firms are now on the verge of collapse.

Last week, some of the affected generation companies dragged the Nigerian government and the minister of power to court over allegations of extending preferential treatment to two new power firms, Accugas and Azura.

They also alleged that they barely receive regular and up-to-date payments from the N701 billion power sector intervention fund put in place by the Nigerian government.

But on Monday, the minister, Babatunde Fashola, accused the generation companies of attempts to blackmail the government.

He also alleged that the firms are planning to sabotage government efforts in electricity supply to Nigerians, saying that he was ready to "face them in the law court".

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