Twenty of the 25 power generation companies (GenCos) in Nigeria’s electricity market do not have active power purchase agreements (PPAs), five years after the country concluded its power market privatisation.
A status report from the Nigerian Electricity Regulatory Commission (NERC), equally stated that 18 of the 25 power firms do not have guaranteed gas supply agreements (GSAs) with gas producers, thus indicating that the transactional terms between the Gencos and gas suppliers are perhaps operated on best-endeavour basis. Active GSAs and PPAs are, according to energy market experts, the model documents that signify that the electricity sector of a country is operated on firm contract basis.
However, the NERC document showed that the three hydro Gencos with generation capacities of 600 megawatts (MW) for Shiroro; 578.4MW for Jebba, and 760MW for Kainji do not have active PPAs. Gas-fired Gencos, which include Afam; Delta; Geregu -1 and 2; Sapele 1 and 2; Egbin; Omotosho 2; Olorunsogo 2; Alaoji; Ihovbor; Calabar; Gbarain; Trans Amadi IPP; Rivers IPP; Ibom Power and Omoku, do not also have active PPAs and GSAs.
Omotosho – 1 and Olorunsogo –1 also are without GSAs but have active PPAs. The NERC report stated that only three Gencos – 650MW Afam VI operated by Shell; 480MW Okpai plant operated by Agip, and 85MW-capacity Paras IPP have both active PPAs and GSAs.
It explained that the reason why the Gencos have not activated their GSA was that they were, “yet to receive the expected payment guarantee from NBET or any other federal government agency. They say as soon as the guarantee is obtained, GSA will be activated under 24 hours.”
Source: THIS DAY