April 21, 2024

NBET owes  GenCos N120.15bn in Q1, 2022 – Report

Solomon Ezeme

The Nigerian Bulk Electricity Trading Plc (NBET) is owing the twenty(25) Power Generation Companies (GenCos) a total sum of N120.15 billion for the settlement cycle in the first quarter (Q1) of 2022. This is the debt for power wheeled from their respective generation plants into the national power grid.

This figure is based on data obtained from NBET by EnergyDay, showing monthly invoices from the GenCos and payments made to the power companies for electricity sent into the grid, between January 2022 and April 2022, being the payment cycle for grid distributed electricity.

This amount also constituted 45.06% of invoices presented by the generation companies for the period under review.

The total claims by the GenCos stood at N266.66 billion while only N146.51 billion (54.94%) of the debt was paid by NBET, during the period.

EnergyDay’s month-on-month analysis of the data revealed that, in January, NBET paid the 25 GenCos (including Kainji, Jebba, Shiroro, Egbin, Ughelli Transcorp, Sapele Steam, Alaoji, Olorunsogo, Afam and others) NN36.65 billion only, which was about 50.59% of the N72.46 billion invoice presented by the companies for the month.

Out of the N65.55 billion invoice presented by the GenCos for power produced in February, NBET paid only N39.81 billion (59.82%).

In March, a total of N64.67 billion was presented to NBET by the GenCos for power supplies to the grid. Only N31.27 billion (which represented 48.35% of total debt for the month) was paid to all 25 power companies.

NBET paid GenCos N38.78 billion from the NN63.98 billion invoice for April, which marked the end of Q1 2022. The payment constituted 60.62% of the total invoice for the month.

NBET in the report revealed that it is yet to make payment to GenCos from funds received through other sources of funding including Federal Government Budgetary appropriation , payment assurance facility. and World Bank’s Power Sector Recovery Operation(PSRO)

EnergyDay recalled that the generation companies in March 2022, while attributing the worsening power situation in the country to NBET’s failure to settle debt owed GenCos, complained that they had exhausted all their sources of borrowing and could no longer run their plants optimally.

They noted that the Central Bank of Nigeria (CBN) instructed the banks not to lend money to any of the generation companies.

Dr. Joy Ogaji, the Executive Secretary of the Association of Power Generation Companies (APGC), said that GenCos were owed a total of N1.644 trillion, since 2013 when the power sector was privatized under the administration of former President Goodluck Jonathan.

“We are currently owed N1.644 trillion. One of the reasons that the power plants are down is due to inefficient management of the grid,” she had stated.

Ogaji explained that the generation companies produced below capacity because they lacked sufficient funds to meet their operational costs, especially the cost of purchasing gas to power their plants.

She added, “If you give us gas, provide forex to carry out maintenance. I have told you most of the units are down and they need money to fix them.

“Give us enough money to pay our gas suppliers because it is a pre-payment. But for power, it is taken and paid later. There is no way that this misalignment will help us.”

The NBET data further revealed that, of the 26 grid-connected plants, Gbarain NIPP was not producing during the period in review, while Olorunsogo (Power) NIPP and Gerugu (Power) NIPP were idle in January and March, respectively.
NBET owes Nigerian GenCos N120.15bn in Q1 2022.