The Executive Secretary, Association of Power Generation Companies (APGC), Barrister Joy Ogaji, on Monday raised the alarm over the liquidity challenges facing the electricity generation companies otherwise known as Gencos , saying that their current shortfall has exceeded N1trillion.
Speaking with The Nation on phone, she noted that the N701billion Power Assurance Guarantee, which the Federal Executive Council approved for the companies in the first quarter of 2017, has been exhausted.
According to her, there was a high hope that the Federal Government would make the electricity distribution companies (DisCos) pay at least 80% of their invoices but the government has not realized it.
She said: “the major problem that the generation companies are facing now is that of liquidity. The N701billion is over. The government has not succeeded in making the DisCos to pay at least 80% of their invoices. The N701billion got finished in December. We don’t know how the Gencos will survive.”
Insisting that the major problem confronting the companies is that of liquidity and not gas supply, she noted that the GenCos have not exhausted their present allocation of gas to power.
The inability to pay for the gas, according to her, is responsible for the low utilization of gas.
Continuing, she said “we have neither been able to pay for gas nor provide the gurantee.”
The Executive Secretary, who was asked how the increase in the fine or penalty for gas flaring has affected the supply of gas for power, described the regulation as a welcome development, which does not in any way make any difference in the gas to power.
The Minister of Power, Works and Housing, Babatunde Fashola had late last year told reporters in Minna, Niger State that owing to the Power Assurance Guarantee payment to Gencos, their monthly payment had risen 20% to 80%, bringing their production to 7,000mw.
Meanwhile, the Managing Director, Transmission Company of Nigeria (TCN), Mr. Mohammed Gur Usman had in December told reporters in Abuja that the recent increase in the penalty for gas flaring by the Department of Petroleum Resources ( DPR) would lead to increase in gas to power to further boost power supply in the country.
But Barrister Joy Ogaji insisted yesterday that liquidity and not gas is the problem of the companies.