In 5 Months, 25 Gencos’ Earnings Drop To 29.4%
The 25 electricity generation companies (Gencos) that produce and supply electricity in Nigeria have had their monthly payments for power supplied to the country’s national grid cut down to an average of 29.4 per cent from about 80 per cent that was recorded in 2018.
The Gencos included the Agip (Okpai), Shell (Afam VI), Azura Power, Trans Amadi (First Independent Power Limited (FIPL), Rivers IPP (FIPL) Omoku (FIPL), Ibom power, Gbarain NIPP, and Ihovor NIPP.
Other were the Sapele (Ogorode) NIPP, Omotosho Genco NIPP, Olorunsogo NIPP, Odukpani (Calabar) NIPP, Geregu NIPP, Alaoji NIPP and Omotosho Genco.
Also, on the list which Economic Confidential obtained from the Nigerian Bulk Electricity Trading Plc (NBET), which covered the period July to November 2019, also were Olorunsogo Genco, Afam IV-V, Geregu Genco, Sapele genco, Ughelli Transcorp, Egbin Power, Shiroro hydro power, Jebba and Kainji hydro power stations.
The NBET indicated that between the period, the Gencos submitted invoices worth N268.668 billion to it for payment for power they supplied to the grid, but were paid N78.298 billion from monies remitted to it by the 11 power distribution companies (Discos).
On the average, it explained that the Gencos got paid 29.4 per cent of their total invoices, leaving about 70.4 per cent of their invoices unsettled.
It explained that in July 2019, the Gencos submitted invoices worth N54.648 billion, but were paid 19.50 per cent of the amount, which was N11.048 billion; in August they submitted N53.896 billion worth of invoice and got N14.935 billion or 27.71 per cent of their invoices, and in September it was N53.314 billion worth of invoice submitted and N14.764 billion (27.69 per cent) paid to them.
The situation continued in October when they submitted N52.329 billion worth of invoice and got 37.94 per cent of that paid, which amounted to N19.855 billion.
In November, they got N18.697 billion or 34.32 per cent of the N54.481 worth of invoice they sent to the NBET paid to them. The figures for December 2019 were however not seen by this paper as at the time of filing this report.
The Gencos were previously paid up to 80 per cent of their monthly invoices from a N701 billion loan the Central Bank of Nigeria (CBN) gave to the NBET in 2017 to support its financial obligations to them (Gencos) for at least a year, however the financial support dried up by the end of 2018 resulting to the shortfall in full settlement of Gencos’ invoices.
The Executive Secretary of the Gencos association – the Association of Power Generating Companies (APGC), Dr. Joy Ogaji, had complained of the financial difficulties the Gencos were facing. Recently, Ogaji equally raised the alarm on the potential impacts of the hike in Value Added Tax (VAT) rate to 7.5 per cent on the operations of the Gencos.
