The Power Generation Companies have alleged that the Nigerian Bulk Electricity Trading Plc (NBET) owes GenCos in the country about N1 trillion debt. This was disclosed by the Executive Secretary, Association of the Power Generation Companies, Joy Ogaji.
According to Ogaji, the debt had become a huge burden as it was threatening their viability and undermining their ability to invest more.
What you should know: The deal between NBET and the GenCos is such that NBET buys the electricity in bulk straight from them through Power Purchase Agreements (PPAs). Thereafter, it is sold through vesting contracts to the DisCos, which then supply it to the consumers.
Ogaji expressed displeasure and fear about the survival of the industry while saying that since 2013 NBET had accumulated so much debt.
“Estimates that the trading company has amassed N1tn debt to power producers since 2013 are “extremely conservative. To be frank, I’m afraid of the survival of the industry in the next six months. My contract is with NBET to put power on the grid and be paid 100% for it. Whether your off-takers are paying you or not, that shouldn’t be my problem,” Ogaji said.
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Nairametrics had reported when the GenCos agreed to shut down power production and supply because of NBET’s proposed 0.75% administrative charge and a debt of over N1 trillion.
Although the GenCos seemed to have been more upset over NBET imposing 0.75% administrative charge on the companies for payment of gas invoices than the debt of over N1 trillion owed to them, both were still given as the reasons for imminent power shutdown.
On the other hand, the DisCos have also aired their complaints about NBET’s tariffs in the industry. According to them, NBET didn’t institute realistic tariffs when the electricity industry was partially privatised in 2013, and so the price keeps increasing without consideration of inflation or a deterioration in the exchange rate.