The liquidity crisis in the nation’s power sector has taken a turn for the worse as payment to generation companies for the electricity produced and fed into the national grid has slumped to 14.55 per cent.
The Nigeria Bulk Electricity Trading Plc failed to pay the Egbin and 24 other power stations a total of N181.39bn from January to April this year, data obtained from NBET on Monday showed.
The government-owned NBET buys electricity in bulk from Gencos through Power Purchase Agreements and sells through vesting contracts to the distribution companies, which then supply it to the consumers.
NBET received a total invoice of N226.12bn from the Gencos in the four-month period but paid only N44.73bn, representing 14.55 per cent of the invoice.
In January, the bulk trader paid 30.11 per cent (N15.61bn) of the N51.85bn invoice from the Gencos but the payment fell to 25.46 per cent (N13.09bn out of N51.42bn) in February.
The payment made to the Gencos by NBET slumped to 11.05 per cent (N5.84bn out of N52.82bn) in March but rose to 14.55 per cent (N10.19bn out of N70.03bn) in April.
The total power generation in the country stood at 3,341.2 megawatts as of 6am on Sunday, with 10 of the 27 power plants on the national grid being idle, according to the Nigerian Electricity System Operator.
The power plants that didn’t generate electricity as of 6am on Sunday were Geregu II, Sapele II, Alaoji, Olorunsogo II, Omotosho II, Ihovbor, Gbarain, AES, ASCO and Omoku.
According to NBET, the payment to the Gencos are based on receipts from the Discos.
“The absence of a take or pay obligations on Discos for energy supplied combined with direct interference by the Transmission Company of Nigeria in Discos’ despatch combine to cause repeated load rejection by Discos, which creates financial liability for NBET and also compromises grid safety and reliability,” the National Economic Council said in a recent report.
The NEC’s Ad-Hoc Committee on Ownership Review and Analysis of Discos and Electricity Sector Reform noted in the report that the power sector had underperformed due to critical challenges.
“Urgent measures needed to turn the sector around include recapitalisation of Discos, firm implementation of industry rules/contracts and the insistence on sound governance principles that improve performance,” the committee said.
It said the challenges included non-implementation of cost-reflective tariffs, misalignment between the investors and the Bureau of Public Enterprises on required investment in Discos, under-investment in infrastructure and poor implementation of rules/contracts.