As Senate comes to the rescue
Ministries and agencies of the Federal Government owe Electricity Generating Companies, GENCOs, N213 billion
The amount covers the period of November 1, 2013 to January 31, 2015, while a second segment of debt being the shortfall during the transition electricity market, TEM, between February 1, 2015 to date, is yet to be disclosed by the National Bulk Electricity Trader, NBET.
This was disclosed by the leader of the delegation of the Electricity Generation Companies, Engr Mohammed Daudu, when they visited the leadership of the senate to plead for its intervention.
The delegation said though the Federal Government had initiated a settlement of the first segment through the CBN/Nigeria Electricity Stabilization Fund but it regretted that less than 40 per cent of the money was released to the GENCOs.
It also lamented that a member of the electricity generating companies that contributes 35 per cent of the power grid is yet to be paid any money and appealed to the senate to prevail on the CBN to conclude plans on the payment of the stabilization fund.
Daudu, who complained of scarcity of foreign exchange, said scarcity of foreign exchange for the transaction was a serious hindrance since most of the spare parts and other equipment used for the operation of the GENCOs largely imported.
He complained that the GENCOs are not allowed to include Value Added Tax (VAT) when selling their products to the DISCOs, suggesting that VAT be included in the bulk purchase to cushion the effects on their revenue.
The leader of the GENCOs’ delegation described non-availability of gas as the biggest challenge befalling the electricity generation companies, explaining that if there is additional gas input of 500mmcf to the generating companies there would be increased electricity generation to 10, 000 megawatts from its present capacity of 2,673.4 megawatts of electricity.
Following these complaints, the Senate President disclosed that the senate has mandated its Committee on Power to liaise with the Central Bank of Nigeria, CBN and Federal Ministry of Finance to address debts owed by the Federal Government to the Electricity Generating Companies, GENCOs, in the country.
The Senate also directed the committee to work in conjunction with the relevant stakeholders on how to address the problems of transmission and capacity needs of the electricity generating companies.
Senate President, Saraki, who disclosed this in Abuja when a delegation of Electricity Generating Companies visited him, said it was a huge problem when electricity is generated but cannot be transmitted.
He said efforts must also be made to ensure that adequate gas was made available to the GENCOs to meet the demands of the Electricity Distributing Companies, DISCOs.
Saraki said the objective of the joint efforts was to ensure that the debts owed the GENCOs are paid to enable them meet their targets.
He urged the Senate Committee on Power to ensure that the problems of generation and distribution are resolved, stating that it makes no economic sense to generate 10,000 megawatts of electricity, when it cannot be distributed to end users.
Saraki, who called for a quick solution to the problems affecting electricity distribution, urged the federal government to always ensure availability of adequate gas supply to the electricity generating companies, and thus “bring some confidence into the chain of activities in both the generation and distribution of electricity”.