The Executive Secretary of Association of Power Generation Companies (APGC), Joy Ogaji has disclosed four gas generating companies have shutdown production, as these companies struggle to access fresh loans.
The four gas generating companies were unable to pay their debt to Shell Petroleum Development Company and Total, leading to the forceful shutdown of their production plant, The Nation reported.
Before the shutdown by the four GenCos, Ogaji had warned gas generating companies might result to shutting down power plant. In the report by Nairametrics, she stated the challenges facing the GenCos are beyond them.
Ogaji disclosed the gas generating companies are seeking credit facilities from banks to continue production since the liquidity issue that exposed GenCos to over N1 trillion shortfall.
“Some of the GenCos that can access loans have resorted to taking loans to buy gas. Others that don’t have access to such loans are shutting down… Shell and Total have shut down some of the power plants that the power plants to pay them, or do not have plans to pay them.
“From what we get it is about four plants. Some of them don’t want their names mentioned. You know it is political season now.”
Federal Government intervention
The Federal Government had initially approved N701 billion Power Assurance Guarantee in the first quarter of 2017, but according to Ogaji, the intervention fund have been exhausted.
She stated that FG has not succeeded in compelling the electricity distribution companies (DisCos) to pay 80 per cent of their invoices which the GenCos depended on for operation.
“The major problem that the generation companies are facing now is that of liquidity. The N701 billion is over.
“The government has not succeeded in making the DisCos to pay at least 80% of their invoices… The N701 billion got finished in December. We don’t know how the Gencos will survive.”
She, however, refuted claims that the challenge the GenCos has is gas supply, clarifying that the GenCos are yet to exhaust their present allocation of gas to power.