Electricity companies on Monday warned that they may be forced out of business should a staggering debt of about N601 billion owed them by consumers remain unpaid.
The power generation companies (GenCos) made their position known at the Nigeria Power Summit, part of the ongoing Nigeria Oil and Gas Conference (NOG) holding in Abuja.
The investors stated that the off-taker, the the Nigerian Bulk Electricity Trading Plc (NBET) – a Federal Government’s owned public liability company – had paid only about 20 per cent of the cost of power generated.
Managing Director and Chief Executive Officer of Mainstream Energy Solutions Limited, Mr Lamu Audu noted that foreign exchange (forex) challenge also remains a major bottleneck for power investors as a result fluctuating exchange rates, which was less than N200 to a dollar when the power assets were bought, and currently above N350.
He said: “Virtually all the spare parts used in the power sector are imported and we need foreign exchange to procure them. But, unfortunately, the fluctuating exchange rate has made planning difficult for investors.”
The Nation reports that the electricity companies also raised concerns about Nigeria’s ageing transmission infrastructure, which often causes the rejection of generated power by the Transmission Company of Nigeria (TCN).
“This is a major loss on the part of power generation companies. When the generated power is rejected, who bears the loss? I think government should be in a position to pay for this. And going forward, I think TCN should be privatised,” Audu advised.
Managing Director of Sahara Power, Mr Kola Adesina, also lamented about the paucity of funds for power investors, adding that power sector being a cycle feeds from four sources; gas, generation, transmission and distribution. He said when one leg of the cycle is stifled of fund, all other segments are affected from functioning at optimal level.