By Adedapo Adesanya
The Minister of Power, Mr Adebayo Adelabu, has disclosed that the federal government was working to gradually offset the debt owed Nigeria’s largest power generation company, Egbin Power, from April 2024, noting that constraints of gas supply and foreign exchange (FX) are also being tackled.
Mr Adelabu gave this assurance during his visit to the power plant in Lagos as part of his strategic measures to strengthen understanding among stakeholders, offer robust support to players, and address the challenges in the sector, with the overall aim of boosting power supply in Nigeria.
“The federal government is prioritising paying down on the outstanding debt and I have assured the board and management of Egbin Power that, effective April, we will start paying as a form of encouragement to continue to have them in operations,” the Minister said, according to a statement.
Regarding the constraints encountered by power generation companies (GenCos) in accessing forex, Mr Adelabu stated that crucial steps were being taken to prioritize allocation to the GenCos.
“Forex sourcing has been a major constraint to effective maintenance of the facility. I have seen what we have on the ground here, and the critical need for spares and tools for continuous maintenance. We will liaise with the Central Bank of Nigeria (CBN) to prioritize foreign exchange allocation to the power sector.
“This will ensure the companies can ramp up capacity in terms of output. It is not just peculiar to Egbin Power Plant, it is across all the power generating Plants. They need Forex for them to be able to maintain the turbines and replace tools and spares. This has been a major issue. I am going to take steps to ensure I liaise with the CBN to see how they can prioritize Forex allocation to the power-generating companies,” he added.
While speaking on challenges of gas supply, he explained that engagements were held with the Ministry of Petroleum Resources and gas suppliers as part of measures to guarantee payment of debts and resolution of the gas constraints.
“Gas shortage has impeded almost all our gas power plants. And we already had a conversation with the Minister of Petroleum Resources. We are also meeting with the gas suppliers to plead with them and have an understanding that the FG is prepared to start paying down the debt that we owe the gas supply companies.
“We need to make some cash injection in terms of payments, we want to give them some guaranteed debt instruments in terms of promissory notes. And we are looking at allowing them access to Nigerian gas wells. So that this will be used to defray the outstanding debt of the gas suppliers over time,” he explained.
The Minister commended the Board and Management team of Egbin Power for its robust investment to improve, sustain and maintain the Plant’s infrastructure and facility while contributing largely to the sector despite the challenges.
Speaking on the issues, the Chief Executive Officer (CEO) of Egbin Power, Mr Mokhtar Bounour, said: “One of the major challenges we are facing is gas constraint, which is not allowing us to run the full capacity of the Plant. It requires a lot of investment efforts to keep the units running and safe.
“The other issue is the accumulated debt which the Minister discussed with us. On our part, we are adequately ensuring the maintenance, availability of the Plant and its efficiency. We are investing a lot to get these units to run optimally. This requires millions of dollars in investment,” Mr Bounour explained.
He commended the Minister for his commitment to address the challenges. “We highlighted the challenges we are facing, and the Federal Government, through the Minister of Power, has promised to start solving them gradually so we can start seeing improvements soon. We hope that the liquidity challenge will be solved soon as the Minister has promised,” Mr Bounour added.
In a related development, electricity distribution companies (DisCos) have pleaded for understanding from their customers as the country plunged into another blackout due to grid collapse – the second time this year after it collapsed on February 4.
The national electricity grid collapsed at 4:30 p.m. on Thursday, throwing millions of homes and businesses into darkness.
Dipo Olowookere