The lingering legacy debt totaling about N1.7 trillion since 2013 is affecting fresh investments by electricity generating companies in the country, the electricity generation companies have said.
Speaking on the challenges facing electricity generation in the country, the Executive Secretary, Association of Power Generation Companies (APGC), Joy Ogaji, said the inability of the Federal Government to settle the protracted debt debacle since the unbundling of the power sector has posed serious hindrance to the effort to boost electricity generation capacity.
Ogaji spoke during a panel discussion session at the National Association of Energy Correspondents (NAEC) Strategic International Conference in Lagos.
She said the liquidity challenge has made operations in the electricity generating value chain difficult for the generation companies.
GenCos, she said, were currently owed about N1 trillion for gas suppliers, and apart from other indebtedness for servicing loans used for the acquisition of the companies since 2013.
“The Nigerian Bulk Electricity Trading Company (NBET) needs to intensify efforts to ensure remittances by the 11 electricity Distribution Companies for energy consumed by their customers.
“We are ready to generate the power needed in Nigeria, but utilisation had been stagnated in the country for a long time due to transmission and distribution constraints.
“Just to give a context, on November 1, 2013, when the privatisation of the power sector took place, power supply was 3,427MW on the day of takeover. On December 1, 2013, power had gone from 3,427MW to over 4,003MW, and by 2020, it had gone up to nearly 8,000MW,” she said.
Ogaji lamented that the average off-take of electricity from the GenCos was about 4,000MW from 2013 till date, describing it as “not good for business.”
This, she said, did not encourage any investor to keep investing, because clearly, it shows the product by the GENCOs was not needed.
She said when demand is not moving in line with the production, the producer would not be incentivised enough to produce more, noting that this was a major problem the GENCOs are grappling with.
Another big challenge facing the companies, she said, was lack of access to foreign exchange to acquire the equipment required for their operations, adding that this has further constrained the operations of the companies in recent times.