The minister for Petroleum and Energy, Hon. Nanni Juwara, on Wednesday informed lawmakers that the primary reason for the delay of over US$20 millions outstanding balance payment to SENELEC and Karpowership was the depreciation of the dollar.
Responding to a question asked by the Member for Banjul North regarding the outstanding invoices of NAWEC (National Water and Electricity Company), the minister further updated the Assembly that "as of September, the outstanding balance that NAWEC owes to Karpowership was US$8.4 million based on invoices of June, July and August 2024.
The debt to SENELEC (Société Nationale d'Électricité du Sénégal) amounts to 9.8 billion CFA, which is equivalent to US$16.1 million also covering invoices of June, July and August, he disclosed.
He also explained that another reason for the delay in payment was attributed to the cash flow challenges faced by NAWEC due to non cost of reflective tariff which is compounded by rising cost of foreign currencies, as both Karpowership and SENELEC require payment in foreign currencies that continued to appreciate against the Gambian Dalasi from January to August 2024."
"The increase in power purchase cost, from SENELEC and Karpower driven by fluctuations in foreign currency rates amounted to about D796,000,000."
He also made it clear to deputies that he was aware that NAWEC had already entered into a payment plan with both suppliers.
When asked if there was any clause in the agreement with SENELEC and Karpowership that if there is an appreciation against the dollar there should be a renegotiation of the contract so that Gambia could not be at a disadvantage, the minister's response was negative, stating they don't have a clause like that in the agreement document.
The minister was also asked if his ministry had plans of terminating the contract with both suppliers and to look inwards on how to take ownership of the country's electricity supply.
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Responding to this, he stated that "there are no immediate plans to terminate these contracts. However, "we have plans to increase our local genetic capacity both in terms of thermal energy and renewable. The focus is more on renewable energy that is why we have recently launched tender for a 50 Mega Watts solar plan to be located in Jarra Soma."
"The evaluation is on going for the 50 mega watts and bids were received last Thursday. Under normal circumstances, the construction period for such plans is 12 to 18 months," he said.
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