Nigeria may witness prolonged national blackout and consequently socio-economic, industrial and business losses of the threat by the Association of Power Generation Companies, (APGN) is allowed to be carried out.
APGN which comprises 23 power generation companies in the country in a statement on Monday signed by the Chairman of the Board of Trustees, Col. Sani Bello (retd.) warned that the electricity distributions companies can no longer guarantee a steady electricity supply if they were not paid the debt they were being owed.
They decried that they were enmeshed in liquidity crisis in the electricity market.
According to them, there were being owed over N4 trillion.
They said the debt burden and operational constraints currently facing the companies could force an imminent shutdown of power plants if urgent interventions were not implemented.
They warned that the continued non-payment for electricity generated and consumed on the national grid was pushing the Nigerian power sector towards a total collapse.
The statement read, “The Power Generation Companies (“GenCos”) are constrained to issue this press release to draw the attention of the Federal Government and key stakeholders to the need to urgently address the issue of inadequate payment for electricity generated by them and consumed on the national grid, which is currently threatening the continued operation of their power generation plant.
The 23 power generation companies in Nigeria have warned that they can no longer guarantee a steady electricity supply due to the worsening liquidity crisis in the electricity market, with outstanding debts now exceeding N4tn.
The firms, under the aegis of the Association of Power Generation Companies, raised the alarm in a statement issued on Monday and signed by the Chairman of the Board of Trustees, Col. Sani Bello (retd.).
The statement, was titled ‘Over N4tn unpaid invoices threaten GenCos imminent shutdown.’
They said the debt burden and operational constraints currently facing the companies could force an imminent shutdown of power plants if urgent interventions were not implemented.
They warned that the continued non-payment for electricity generated and consumed on the national grid was pushing the Nigerian power sector towards a total collapse.
They alleged lack of a clear financing plan from the Federal Government, adding that there was worsening fiscal and operational constraints within the Nigerian Electricity Supply Industry.
According to them, the Nigerian Bulk Electricity Trading Plc and other stakeholders were neglectef GenCos in the application of the NESI’s “waterfall arrangement.”
They alleged that other service providers receive 100 per cent of their market invoices while GenCos get between 9 per cent to 11 per cent of what is due to them.
The Minister of Power, Adebayo Adelabu, had in February said the government owes electricity generation companies and electricity distribution companies over N4 trillion in electricity subsidies.
He said N2 trillion was being owed to GenCos as legacy debt, while another N1.9 trillion was being owed to them as part of the electricity subsidy for 2024.
He added that DisCos were owed N450 billion for the 2024 electricity subsidy.
The statement read in part: “The Power Generation Companies (“GenCos”) are constrained to issue this press release to draw the attention of the Federal Government and key stakeholders to the need to urgently address the issue of inadequate payment for electricity generated by them and consumed on the national grid, which is currently threatening the continued operation of their power generation plants.
“Against the backdrop of the many challenges facing the power sector in Nigeria, the crises from cash liquidity are on the top burner and have reduced GenCos’ ability to continue to perform their obligations, thereby threatening to completely undermine the Electricity value chain.
“In the light of the severity of the issues highlighted above, the GenCos are requesting that immediate and expedited action be taken to prevent national security challenges that may result from the failure of the GenCos to sustain steady generation of electricity for Nigerians.”
