GenCos Add 4,000MW Power Capacity, Decry N600bn Debt
Power Generation Companies (GenCos) in Nigeria have said they have raised power plants’ capacity by 4,000 megawatts (MW) seven years after the privatization and despite being owed over N600 billion debts.
Speaking against the call for the traversal of the 2013 power sector privatization made recently by the Senate President, the GenCos’ operators said: “On our part, GenCos have made large scale investments and taken business risks in the power sector and fulfilled all aspects of obligations as stated in the stipulated terms and guidelines at inception in November 2013.”
The executive director of the Association of Power Generation Companies (APGC), Dr. Joy Ogaji, in a statement on Monday, said the GenCos have continually operated at their maximum available capacities despite national grid constraints, huge debts by the Federal Government and failure of government agencies and other operators in the value chain to honour their commitments.
As at the takeover of the assets on November 1, 2013, the GenCos and government signed the Power Purchase Agreement (PPA), Gas Supply Agreement (GSA), Gas Transportation Agreement (GTA) and the Grid connection agreement.
The Federal Government also promised to provide Securitisation (Guarantee on PPA) for bank lending, and set a Minimum Performance Target (MPT) for the GenCos.
“However, till date, the guidelines have still not been activated,” APGC.
APGC said the inactivation resulted in unpaid sums for power supplied to the grid as the GenCos expect payment of over N600 billion outstanding debt to them since the inception of privatization.
The lack of payment guarantee has also caused defaults in invoice payment from other parties in the electricity market, it added.
APGC also said its members have 8,589MW available capacity out of 134,427MW installed capacity across over 23 power plants but the maximum power ever reached on the national grid was 5,375MW.
“If we had a grid capacity that matches our average available capacity, 3,214MW can be made available immediately to Nigerians at no additional cost,” APGC revealed.
On the impact of its investments since the privatization, APGC said: “GenCos have doubled their available capacities from 4,214MW at takeover in 2013 to 8,145MW in 2020.
“Out of the 8,145MW available capacity, only 3,987MW is generated for Nigerians as the balance 4,159MW is stranded as a result of constraints in the national grid capacity.”
In the first five month of this year, APGC said 20,775MW of power has been stranded without utilization on the national grid amidst calls for increased electricity supply by Nigerians.
While APGC said the call by the Senate to cancel the privatisation exercise was premature one, the association urged the legislature to focus on the highlighted structural issues.
It wants the Senate to review the Electric Power Sector Reforms Act (EPSRA), the Multi-Year Tariff Order and others made by the Nigerian Electricity Regulatory Commission (NERC), and conduct an independent stress test on the generation, distribution and transmission capacities for proactive planning.