HomeBusinessFG to pay GenCos, gas suppliers’ debts April – Minister

FG to pay GenCos, gas suppliers’ debts April – Minister

The Minister of Power, Adebayo Adelabu, has disclosed that the Federal Government would start paying part of the debts it owes power generating companies and gas suppliers from April.

Adelabu made this revelation during a working visit to Egbin Power Plc in Ikorodu area of Lagos State on Thursday.

The minister also said he would liaise with the Central Bank of Nigeria to prioritise foreign exchange allocation to the power sector, saying that would boost its ability to ramp up capacity in terms of generating output.

Speaking on the debt being owed to stakeholders in the power sector, Adelabu said he was in Egbin to seek its understanding.

“The Federal Government is owing the power generating companies a lot of money; top on the list of the creditors is Egbin Power plant. We don’t want this to cripple their operations. They have been magnanimous enough to continue generating, otherwise they could have parked up. We don’t want this to happen to this power asset.

“The Federal Government is now prioritising paying down on the outstanding debts and I have assured the board and management that effective from April, we will start paying down on debts, as a form of incentive to continue to have them in operation,” he stated.

According to Adelabu, gas shortage has been an impediment to all gas-fired power plants.

He declared, “We already have discussions with the Minister of State Petroleum Resources (Gas) and we are also meeting with the gas suppliers to plead with them that the Federal Government is prepared to start paying down on the debts that we owe the gas supplying companies.

“We are going to make some cash injection in terms of payment and give them promissory notes. We are also looking at allowing them access to Nigeria’s gas wells so that this will be used to defray the outstanding debts of the gas suppliers over time.”

He noted that soon the issue of debts would be sorted out and the impact would be felt from April.

The minister added, “I’ve had meetings with the Minister of Finance and Minister of Budget and Economic Planning, and they are promising me that they are going to give us some funds to start paying down on these debts.”

The Chief Executive Officer of Egbin Power, Mokhtar Bounour, disclosed that the firm was losing huge revenue to the current gas shortage threatening power generation nationwide.

He noted that the power generating company had not been able to run the plant to full capacity due to low gas supply.

According to Bounour, the plant that can generate 1,000MW but currently generates an average of 400MW, blaming the nonavailability of gas.

Bounour said the management of Egbin POwer plant had highlighted all the challenges being faced here, saying, “They promised to solve them gradually so we can see improvement in the near future.”

“One of the major challenges we are facing right now is gas availability. We don’t have enough gas to run the full capacity of the plant and we are losing a lot of revenue. This is a 40-year old plant, we are investing a lot; it requires a lot of effort, and a lot of investment to keep the unit running and safe; and if you don’t generate, you will have a big imbalance.

“The quantity of gas allocated to us is not enough to run the six units. We have received calls from the gas suppliers that they have some technical challenges to sort out. We hope we can receive a good quantity of gas as soon as possible,” he remarked.

He added that the Federal Government was owing the GenCo about N1.4tn.

“The second challenge is the cumulative debts. We are having some liquidity issues that we all hope that will be solved soon. The Federal Government is owing us N1.4tn, but the minister has promised that starting from April, we will start seeing improvements, and we are looking forward to it. If the debts are not paid, the business can’t be sustained,” he disclosed.

The PUNCH recalls that Adelabu said in February that the Federal Government was owing the gas companies up to $1.3bn.

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