Despite incessant assurance by the Federal Government and stakeholders in the power sector, indications have emerged that the country could face more electricity crisis following unpaid invoices exceeding N6 trillion to power generation companies. The situation, according to the generation companies, has placed them at the greatest risk in the electricity value chain as the debts keep escalating.
The current position of the GenCos is coming barely one month after the Federal Government took steps towards resolving the debt burden with five power generation companies signing settlement agreements under the Presidential Power Sector Debt Reduction Programme, following the issuance of a N501 billion bond.
The bond, which reportedly recorded 100 per cent subscription, was issued in Lagos, attracting interest from pension funds, banks, asset managers, and other institutional investors, signalling renewed confidence in the government’s electricity market reforms and its approach to resolving legacy sector challenges.
Despite this arrangement, the power generation companies have raised the alarm that their operations were facing a big risk as the liquidity crisis is threatening the sustainability of electricity supply.
According to the Chief Executive Officer of the Association of Power Generation Companies, (APGC), Joy Ogaji, rather than castigate operators, attention should be focused on addressing the liquidity crisis.
She said power generation companies remained the most financially exposed segment of the electricity value chain because they generate electricity that is not fully paid for due to revenue shortfalls across the market. She also said the operators acknowledged the frustrations of Nigerians regarding unstable electricity supply, adding, however, that the association firmly rejected the characterisation of the sector’s challenges as robbery and a grand deception.
She also opined that such allegations were a misrepresentation of the facts and a disservice to ongoing efforts to stabilise the power sector. Dismissing allegations by the Nigeria Labour Congress (NLC) that electricity firms were engaged in “institutionalised extortion.” she said such a claim was misleading and damaging to efforts aimed at stabilising Nigeria’s fragile power sector.
