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Blackout Looms As GenCos Threaten Shutdown Over N2trn Debt

Published

4 months ago

June 2, 2024

Power Generation Companies (GenCos) are urging the Federal Government to address the N2trn electricity debt, emphasizing that 90 per cent of their monthly invoices remain unpaid.

They lamented that the issue is currently endangering the continued operation of their power generation plants hence 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.”

According to a statement signed by its Board Chairman on Sunday, Colonel Sani Bello (retd.), the GenCos are currently owed over N2 trillion for the power they generated, put into the national grid, and consumed by end users.

And this is in addition to the over 1.7 trillion naira, funding gap created in the recent supplementary MYTO order 2024 without a designated fund to fill the gap.

The statement read, “Even though the supplementary MYTO order leaves about 90% of GenCos monthly invoices unmet without a bankable securitisation or financing plan, the power generated by GenCos has continued to be consumed in full without corresponding full payment.

“The GenCos therefore called on the Federal Government and key stakeholders to urgently address the issue of inadequate payment for electricity generated by them and consumed on the national grid, insisting that the liquidity challenge threatens the continued operation.

“GenCos are of the position that the liquidity challenge threatening the continued operation of their power generation plants must be addressed urgently, and sustainably too. Besides being owed huge debts, GenCos also are operating under very harsh monetary and fiscal conditions, occasioned by the economic realities that face the country today.”

Continuing, the group said in the statement that, “The flow of money within the power industry is one of the fundamental problems preventing Nigerians from enjoying continued and sustainable improvement in electricity supply.

“Expeditiously solving these issues would enable GenCos to meet their critical needs which would, in turn, ensure that they sustainably generate power, to enable Nigerians to have better access to reliable electricity supply. GenCos would like to re-emphasise that this request requires urgent attention.”

The group stated further, “The power generated by GenCos has continued to be consumed in full without corresponding full payment, notwithstanding the commencement of the Partial Activation of Contracts in the NESI which took effect from July 1, 2022, the minimum remittance order, bilateral market declaration, waterfall arrangement, the risks of inflation, forex volatility with no dedicated window to cushion the effect of the forex impact, the supplementary MYTO order which leaves about 90% of GenCos monthly invoices unmet without a bankable securitisation, or financing plan. This situation has dire consequences for the GenCos and by extension the entire power value chain.”

The group further reaffirmed that “GenCos are currently owed over two trillion Naira for the power they generated, put unto the national grid, and consumed by end users.

“This is in addition to the over 1.7 trillion naira, funding gap created in the recent supplementary MYTO order 2024 without a designated fund to fill the gap. This huge debt outlay is now greatly inhibiting GenCos ability to meet their obligations to lenders, O&M operations, necessary maintenance, spare parts procurements, employee-related obligations etc.

“The GenCos expectations of being settled through external support such as the World Bank PSRO has also been dampened due to other market participants’ inability to meet their respective distribution linked indicators (DLIs), enshrined in the Power Sector Recovery Program (PSRP). Access to forex is another problem given that major operation and maintenance needs in the generation subsector are dollarized, the importance of a specialised window or stable dollar allocation option for the GenCos cannot be overemphasized.”

The statement also quoted the group as saying, “GenCos are of the position that there is a need for a coordinated approach by all stakeholders in the NESI to address the liquidity issue realistically and sustainably in the power sector so that Nigerians can have access to reliable electricity supply.

“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.

“GenCos liquidity challenges are further worsened by the various policies introduced such as the payment waterfall in the NESI, which deprioritizes payment to GenCos”.

Related Topics:#Genco Electricity strike

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News

Foundation Visits Orphanages In Benin, Puts Smile On Faces Of Children

Published

30 mins ago

October 3, 2024

Editor

In its efforts to helping the less privileged in the society, Vivian Okoro Empowerment Foundation recently visited various orphanages in Benin, wherein food items and other baby materials were distributed to the children.

INFO DAILY reports that some of the orphanages visit by the foundation are Edo Orphanage, Usama; Iwinosa Orphanage, Zabayo, amongst others.

Speaking to the children from the Diaspora via zoom during the visit, founder of the foundation, Vivian Okoro said the foundation was borne out of her joy to help the less privileged in the society.

“This desire is borne out of God’s love; we love doing it; it’s our passion,” she added.

Quoting from the Holy Scripture on how Jesus Christ used parable to say when you help your neighbour you invariably helped him, Mrs Okoro said he who helps the less privileged fulfils God’s commandments.

The founder, who lamented that the cost of living in Nigeria is becoming unbearable to the average Nigeria, and that propelled the outing, added “so this is our own little way of supporting the downtrodden.”

“We are here to put smile on the faces of the less privileged. The children are happy,” she added

In their separate responses, the directors of the orphanages visited thanked the foundation for the kind gesture and prayed for God’s continuous blessings upon the foundation and its management.

The children too could not hide their feelings as they showered rain of prayers on the foundation

News

Edo Election: Walter Obaseki Descendants Congratulate Okpebholo, Idahosa On Victory

Published

2 hours ago

October 3, 2024

Editor

The direct descendants of Capt. (Sir) Ededuna Walter Obaseki have congratulated Edo State governor-elect, Senator Monday Okpebholo, and his debuty, Dennis Idahosa, on their victory in the just concluded gubernatorial election.

INFO DAILY reports that the All Progressives Congress, APC’s Okpebholo defeated the candidate of the Peoples Democratic Party, PDP, Asue Ighodalo with 291,667 votes as against 247,274 votes.

In a congratulatory message made available to INFO DAILY by Mercy Ededuna Obaseki on behalf of the entire descendants,the family “pray for wisdom and strength to pilot the affairs of the state to a greater height.”

“We have heard of some of your works as a Senator before now and we know that the victory in this election is a clarion call to higher service for the benefit of the entire Edo people.

We believe you have the capability and foresight to deliver the much needed development the Edo people want. This victory is a testament to the trust the Edo people have placed in you. Congratulations once more on your well deserved victory,” the message reads.

The descendants appealed to the the governor-elect and his deputy to use their good office to help them get their late father’s entitlements from both the British and the Nigerian governments.

Late Ededuna Walter Obaseki was a World War II Veteran and a recipient of the World II Campaigns and Gallantry Medals of Honour

Business

FG Waives VAT On Diesel, Cooking Gas To woo Investors

Published

8 hours ago

October 3, 2024

Editor

The Federal Government has introduced new fiscal incentives to boost foreign investments in Nigeria’s oil and gas sector.

The two incentives were unveiled by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun in a statement on Wednesday.

According to the statement by the Finance Ministry, and signed by the Director of Information and Public Relations, Mohammed Manga said the incentives are aimed at revitalising Nigeria’s oil and gas sector.

It also announced that the importation of key energy products and infrastructure, including diesel, feed gas, Liquefied Petroleum Gas, Compressed Natural Gas, electric vehicles, Liquefied Natural Gas infrastructure, and clean cooking equipment would no longer require value-added tax payment.

Manga said the initiative would position Nigeria’s deep offshore basin as a premier destination for global oil and gas investments, bolster energy security, and accelerate Nigeria’s transition to cleaner energy sources.

This policy directive arrives alongside new divestment plans from ExxonMobil and Seplat, which President Bola Tinubu said would receive ministerial approval in the coming days.

The statement read, “In its avowed determination towards ensuring a boost in the nation’s upstream and downstream sector, the Federal Government has introduced groundbreaking concessions aimed at revitalising the industry.

“This is just as the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, unveiled two major fiscal incentives aimed at revitalising Nigeria’s oil and gas sector: Value Added Tax Modification Order 2024 and Notice of Tax Incentives for Deep Offshore Oil & Gas Production, in accordance with the Oil & Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024.”

Explaining further, Manga said, “The VAT Modification Order 2024 introduces exemptions on a range of key energy products and infrastructure, including diesel, feed gas, Liquefied Petroleum Gas, Compressed Natural Gas, electric vehicles, Liquefied Natural Gas infrastructure, and clean cooking equipment.

“These measures are designed to lower the cost of living, bolster energy security, and accelerate Nigeria’s transition to cleaner energy sources.”

It explained that the notice of tax incentives for deep offshore oil & gas production provides new tax reliefs for deep offshore projects, stressing that, “This initiative is aimed at positioning Nigeria’s deep offshore basin as a premier destination for global oil and gas investments.”

The ministry said these fiscal incentives reflect the administration’s steadfast commitment to promoting sustainable growth, enhancing energy security, and driving economic prosperity for all Nigerians.

The statement added, “These reforms are part of a broader series of investment-driven policy initiatives championed by President Bola Tinubu, in line with Policy Directives 40-42.

“They reflect the administration’s strong commitment to fostering sustainable growth in the energy sector and enhancing Nigeria’s global competitiveness in oil and gas production.

“With these bold initiatives, Nigeria is firmly on track to reclaim its position as a leader in the global oil and gas market.

“These fiscal incentives demonstrate the administration’s unwavering commitment to fostering sustainable growth, enhancing energy security, and driving economic prosperity for all Nigerians,” the statement concluded.