N710bn Power Supply Fund Draws Down

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By Jennifer Y Omiloli

Yesterday, electricity generation companies (Gencos) warned that the prevailing nationwide power supply situation may decline significantly from December as the N701.9 billion payment assurance scheme initiated by the federal government through the Central Bank of Nigeria (CBN) and the Nigerian Bulk Electricity Trading Plc (NBET), is drawn down.

The fund will be drawn down before 2019 as it was originally designed to last. The fund was earlier put in place to guarantee prompt payments for power supply.

Recently, the Gencos stated that gas suppliers had begun to issue them notice of disconnection, adding that the Alaoji Independent Power Plant owned by the Niger Delta Power Holding Company (NDPHC) has been disconnected from gas supply by Total while First Independent Power Limited in Rivers State has equally been issued notice of disconnection.

However, their claims, which were made at the 2018 edition of the Power Safety Summit (PSS) in Abuja, was debunked by the NBET, which said there was no cause for alarm, and that it was working hard to ensure payments to Gencos for power supplied to the national grid were made promptly.

The N701 billion was obtained as a loan from the CBN by the NBET to enable it meet up with payments to Gencos for power supplied to the grid considering that monthly remittances of the 11 electricity distribution companies (Discos) to it for power sold to them have remained inadequate to pay the Gencos.

See also: 2019 INEC budget : Senate removes N25.5bn from Power budget, 29 other MDAs affected in budget cut

Speaking on the sidelines of the PSS shortly after making a presentation, the Executive Secretary of the Association of Power Generation Companies (APGC), Dr. Joy Ogaji, stated that the Gencos were worried the stop-gap fund was fast depleting and would not last more than December 2018.

Ogaji, also noted that the Gencos had tried without success to meet with representatives of the federal government in this regards. She added that when the N701 billion finishes, it would be difficult for the Gencos to continue generating power to the grid.

“For the Gencos, we have a contractual obligation with the government and we don’t have a direct contract with the Discos, so, government owes us through the NBET to pay us.

“We are really worried and have called for meetings with the government but as it looks, government is not able to find other solutions because the plan for the N701 billion was such that by this time of the year – December, the Discos’ collections and remittance would have increased to 80 per cent, and at that point, the government would with the PSRP (Power Sector Recovery Programme) and the loan from the World Bank see to this,” said Ogaji.

Meanwhile, the NEMSA has said that at least 453 persons were electrocuted in 46 months since 2015.

NEMSA’s Managing Director, Mr. Peter Ewesor, who disclosed this at the PSS, charged operators in the power sector to work hard to attain a zero target for accidents and electrocutions in the sector.

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