DEBTS OWED GENCOS HIT N500BN

The liquidity crisis in the power sector appears to be assuming an alarming dimension as debt owed the generating companies (GenCos) rises above N500billion even as access to gas by the companies becomes a nightmare.

According to Leadership, the Executive secretary of the Electricity Generating Companies (GenCos), Dr Joy Ogaji, said they (the GenCos) have cried out one time too many for government to see what it can do to salvage the liquidity crisis rocking the sector, but to no avail, except for the promises that steps were being taken towards addressing the problem which they have been getting since June, 2016.

As patriotic Nigerians who want the best for the power sector and the country in general, we have tabled our problems and have made our demands severally to the best of knowledge of the authorities, but we are not getting any result. 

Government has been appealing for our patience, promising that they were working towards resolving the crisis since last year June, but as I speak, we have not seen anything, instead, it is getting worse by the day. 

Currently, the debt owed the GenCos by the bulk electricity trader stands at over N500billion. Tell me how you expect us to cope in the face of the price of gas that has continued to be on the rise. The debt accumulation is on a daily basis because everyday we are generating, and it is adding up, she explained.

The GenCos scribe who expressed deep concern over the difficulties faced by them in getting gas to facilitate the generation of power said the marketers sell the commodity at prevailing FOREX rate on a cash-and-carry basis, making it difficult for most generating companies to cope amidst the raging liquidity crisis.

According to her, the claim in some quarters that gas supply has improved was unfounded as some of the GenCos had shut down due to their inability to access and afford gas for their operations.

She said,

Most of the gas suppliers are now holding us by the throat, saying we must pay on supply, which I think is because they themselves are not sure of what will happen next in the market. 

That is why you now see that it is not all GenCos that can generate now; if you don’t have money in hand, you can’t get gas to generate.

Ogazi, who noted that 4, 217 mega watts (MW) of power was sent out on Tuesday, February, 21, 2017, said the GenCos have capacity to generate 12, 500 MWs all things working together but had been incapacitated by the gas crisis.

Some of us who are managing to buy the gas are doing so with loans, and if you don’t have good payment history, most banks would turn down your proposal. 

So some of us that are still in business are striving hard to do so out of patriotism, not because the government has done anything about the gas situation or the foreign exchange,” she explained further.

Talking about the call by some operators that increase in tariffs was necessary as one of the ways out of the current crisis, Ogaji said “Increase in tariffs is not debatable in the face of the current realities.

She argued that since the prices of all goods and services in the market have gone up, only tariff, being the price paid for electricity, cannot remain low because generation, transmission, and distribution of electricity involve buying of gas, maintenance of the equipment and replacement of the parts which are all imported since we don’t produce them here.