DisCos, TCN owe N2trn for power generation — Ogaji

…As NDPHC spends N1trn to subsidize power

By Uthman Salami

The Executive Secretary, Association of Power Generation Companies (APGC), Dr Joy Ogaji has revealed that the generation companies were owed about N1.75 trillion for power generated for the electricity market since 2013.

This just as the Niger Delta Power Holding Company, a three tier of government owned firm said it had spent about N1 trillion on subsidizing electricity for the consumers, which had contributed to the shortfall in the company’s revenue.

The Secretary of APGC spoke during a panel session at the Association of Energy Correspondents of Nigeria (NAEC) Strategic International Conference in Lagos during a panel session tagged: “Power Sector Dilemma: Issues, Challenges, Opportunities and Strategic Key Solutions.”

Ogaji said GenCos were currently being owed by their gas suppliers about N1 trillion and also servicing loans used for acquisition of the companies in 2013.

She said, “Just to give you a context, on Nov.1, 2013 when the privatisation took place, power was 3,427MW on the day of takeover.

“On Dec. 1, 2013, power had gone from 3,427MW to over 4,003MW and by 2020 it had gone up to nearly 8,000MW.”

Ogaji said that the average uptake of power from the GenCos was about 4,000MWh from 2013 till date which was not good for business.

“So, this does not encourage any investor to keep investing because clearly it shows that your product is not needed.

“Notwithstanding how Nigerians are always saying give us power, but generation production is driven by demand.

“When demand is not moving in line with the production, the producer is not incentivised to produce and this is a major problem,” she said.

She lamented over the lack of access to foreign exchange by GenCos as well as gas, which had become a major challenge to their operations in recent times.

On the same panel, the Managing Director of the NDPHC, Cheidu Ugbo who was represented by the Executive Director in charge of generation at the Niger Delta Power Holding Company (NDPHC), Engineer Kasim Abdullah said the company has been suffering “from a serious shortfall in our tariff in terms of what we get from the market.”

He added that, “We have done some analysis—audit analysis by PwC last year, trying to see what we have so far subsidized the Nigerian electricity industry. And to our surprise we subsidized to a tune of about a trillion Naira.

“This is because our tariff is 28% lower than the market value. And also we have been suffering from restricted operations mostly because of dispatch.”

He said while the demand stands at 23 Gigawatts but the installed capacity is about 13gig and the available capacity is 8 gigawatts and what’s being transmitted and distributed is around 4000 megawatts.

He said despite the full privatization of the sector, there has not been significant improvement in the generation, explaining that the stagnation in the investment on critical infrastructure

While explaining further on the role of NDPHC, he expatiate that, “It is a federation company owned by the three tiers of governments.

“It is a multibillion Dollar infrastructure investment company by the government in the generation, distribution transmission and gas infrastructure.

“Today, we have an installed capacity of about 4000 megawatts with 10 power plants connected to the Grid.

“And about 8 of them are operational. Even as of today, we are generating about 900 Megawatts from the Grid.

“Just to give you a context, on Nov. 1, 2013 when the privatisation took place, power was 3,427MW on the day of takeover.

“On Dec. 1, 2013, power had gone from 3,427MW to over 4,003MW and by 2020 it had gone up to nearly 8,000MW.”

Ogaji said that the average uptake of power from the GenCos was about 4,000MWh from 2013 till date which was not good for business.

“So, this does not encourage any investor to keep investing because clearly it shows that your product is not needed.

“Notwithstanding how Nigerians are always saying give us power, but generation production is driven by demand.

“When demand is not moving in line with the production, the producer is not incentivised to produce and this is a major problem,” she said.

She lamented over the lack of access to foreign exchange by GenCos as well as gas, which had become a major  challenge to their operations in recent times.

On the same panel, the Managing Director of the NDPHC, Cheidu Ugbo who was represented by the Executive Director in charge of generation at the Niger Delta Power Holding Company (NDPHC), Engineer Kasim Abdullah said the company has been suffering “from a serious shortfall in our tariff in terms of what we get from the market.”

He added that, “We have done some analysis—audit analysis by PwC last year, trying to see what we have so far subsidized the Nigerian electricity industry. And to our surprise we subsidized to a tune of about a trillion Naira.

“This is because our tariff is 28% lower than the market value. And also we have been suffering from restricted operations mostly because of dispatch.”

He said while the demand stands at 23 Gigawatts but the installed capacity is about 13gig and the available capacity is 8 gigawatts and what’s being transmitted and distributed is around 4000 megawatts.

He said despite the full privatization of the sector, there has not been significant improvement in the generation, explaining that the stagnation in the investment on critical infrastructure.

While explaining further on the role of NDPHC, he expatiate that, “It is a federation company owned by the three tiers of governments.

“It is a multibillion Dollar infrastructure investment company by the government in the generation, distribution transmission and gas infrastructure.

“Today, we have an installed capacity of about 4000 megawatts with 10 power plants connected to the Grid.

“And about 8 of them are operational. Even as of today, we are generating about 900 Megawatts from the Grid.”