The Federal Government of Nigeria (FGN) has said over N190 billion debts for energy generated and supplied to electricity consumers but not paid for is crushing operations at eight power plants built by the government under the National Integrated Power Projects (NIPP).
Records from the Niger Delta Power Holding Company (NDPHC), showed the Nigeria Bulk Electricity Trading Plc (NBET), the intermediary between Generation Companies (GenCos) and the Distribution Companies (DisCos) had not met its payment obligation to NDPHC, causing operational activities at the eight NIPP GenCos to lag.
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NDPHC, which operates these GenCos, is owned by the federal government with 47 percent shares; the states have 35 percent stake and the local governments have 18 shares.
The firm has also been removed from annual budget and is expected to run its operations and maintenance from what is being generated from the power plants despite the mounting debts, the Managing Director, Chiedu Ugbo said in one of the records.
“As at May 31, 2020 over N190bn was owed to NDPHC for electricity generated from our power plants to the national grid,” it said.
To stop the mounting debt, NDPHC said it wants to start selling energy directly to Eligible Customers without passing through NBET.
The firm said the operational plants have 4,047.3 megawatts (MW) capacity but that the regulatory authority had lowered the tariff at N18.4 per kilowatt hour (KWh) as against N24/kwh paid to other GenCos.
The breakdown of the debt shows that the NIPP GenCos were owed N24.5bn as legacy debt from 2011 to 2013; during the Interim Rule Period of the electricity market from 2013 to 2015, another N6.8bn debt mounted.
From 2015 to 2020, the Transitional Electricity Market (TEM), NDPHC said NBET owed N281.1bn debt for the NIPP GenCos’ energy, resulting in a total debt of N312.4bn.
However, it said, through the federal government’s intervention with the Payment Assurance Facility (PAF) initiative from 2017, NBET cleared N119.4bn of the debt but that N193bn was outstanding since last month.
“The various interventions by the FGN are intended to reduce this indebtedness principally owed by NBET,” it noted.