Nigeria: Privatisation - GenCos Boost Power Capacity By 4,000 Megawatts in 7 Years

(file photo).

Power Generation Companies (GenCos) in the country said they raised power plants' generation capacity by 4,000 megawatts (MW) in the last seven years after the sector's privatization, despite N600 billion debt owed them.

Reacting to the recent call by the Senate President, Sen. Ahmed Lawan, for the reversal of the 2013 power sector privatization, the GenCo operators recalled that they had made substantial investments and taken business risks in the power sector and fulfilled all aspects of obligations as stated in the stipulated terms and guidelines at inception in November 2013.

Specifically, the Executive Director of the Association of Power Generation Companies (APGC), Dr. Joy Ogaji, in a statement on Monday indicated that the GenCos had continually operated at their maximum available capacities despite national grid constraints, huge debts by the Federal Government and failure of government agencies and other operators in the value chain to honour their commitments.

As at the takeover of the assets on November 1, 2013, the GenCos and government signed the Power Purchase Agreement (PPA), Gas Supply Agreement (GSA), Gas Transportation Agreement (GTA) and the Grid connection agreement.

The Federal Government also promised to provide Securitisation (Guarantee on PPA) for bank lending, and set a Minimum Performance Target (MPT) for the GenCos.

"However, till date, the guidelines have still not been activated." APGC said the inactivation resulted in unpaid sums for power supplied to the grid as the GenCos expect payment of over N600 billion outstanding debt to them since the inception of privatization.

The lack of payment Guarantee has also caused defaults in invoice payment from other parties in the electricity market, it added

APGC also said its members had8,589MW available capacity out of 134,427MW installed capacity across over 23 power plants but the maximum power ever reached on the national grid was 5,375MW.

"If we had a grid capacity that matches our average available capacity, 3,214MW can be made available immediately to Nigerians at no additional cost", the group added.

On the impact of its investments since the privatization, the group stated: "GenCos have doubled their available capacities from 4,214MW at takeover in 2013 to 8,145MW in 2020. Out of the 8,145MW available capacity, only 3,987MW is generated for Nigerians as the balance 4,159MW is stranded as a result of constraints in the national grid capacity."

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