The Nigerian Bulk Electricity Trading (NBET) Plc yesterday blamed its inability to meet its obligation to electricity generating companies (GenCos) on the low remmittances from the distribution power firms (Discos) which is between 25 and 30 per cent. Due to the shortfall, the GenCos too cannot meet their obligations to their gas suppliers.
The NBET Managing Director, Dr. Marilyn Amobi, disclosed this in a note to The Nation in Abuja. The note which was endorsed by Mr. Ibrahim Saliu on behalf of NBET CEO, explained that the Nigerian Electricity Regulatory Commission (NERC) is already looking into different ways to solve the liquidity challenge in the electricity market.
Amobi said: “The Nigerian Electricity Supply Industry (NESI) is still facing severe liquidity challenges. Remittances from the DisCos to the market still hover around 25-30 per cent of their invoices.
“This makes it practically impossible for NBET to meet its payment obligations to the GenCos and which in turn constrains the ability of the GenCos to meet their obligations to their respective gas suppliers. The government, through the industry regulator, NERC is examining various ways to address this liquidity issues.”
The Executive Secretary, Association of Power Generation Companies (APGC), Barr Joy Ogaji, confirmed yesterday that the liquidity issue in the industry was yet to abate.
“Nothing has changed. The payment issue has not changed,” she said in a telephone interview.
Ogaji had also said gas suppliers such as Total and Shell Petroleum Development Company (SDPC) had shut their supply to four gas companies for failure to pay their gas debt.
She said the GenCos are looking forward to hearing from the Minister of Power, Works and Housing, Babatunde Fashola and NERC in terms of the sector’s policy direction.
She said: “We are yet to hear the policy direction from Fashola and NERC.”
She had early this year said the N701billion Power Assurance Guarantee intervention for the GenCos got finished in December 2018.
The Ministry’s Permanent Secretary, Dr. Louis Edozien that commented on the payment of shortfall to the GenCos in NERC workshop on eligible customers on February 12, said it is not the responsibility of government to pay for GenCos’ shortfall.
According to him, the government that paid the intervention through NBET will now exit from playing the role.
Edozien said that “In addition to that 2,000 MW, the 4,000mwh that is consistently being delivered is not fully paid for. Government through the nation’s insurance Programme is paying the generation companies for any shortfall payment from NBET.
“Clearly that is not what act intends the industry to be. And ultimately government has to exit from this role.”
Amobi that The Nation asked to comment state whether there is a fresh government intervention for the GenCos, said that “NBET is not the approving authority for power sector intervention funds. If a decision is taken by the appropriate authority on it, the information will be made public.”
Source: The Nation