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FX scarcity, debt threaten Egbin Power Station

 Egbin Power Plc, Nigeria’s biggest power generating plant, said yesterday that huge debt and forex scarcity threaten its operations. The chief executive officer of the…

 Egbin Power Plc, Nigeria’s biggest power generating plant, said yesterday that huge debt and forex scarcity threaten its operations.

The chief executive officer of the company, Dallas Peavey, said in Lagos that the power plant could not import equipment and undertake rehabilitation because of forex scarcity.

He said that the firm was owed over N86bon by the ministries and agencies of the federal government. He said: “Since the electricity companies were acquired…we faced several hurdles in importation of electrical equipment.

“We are still not free from difficulties as access to forex remains a huge challenge. “Most of the equipment used on the 37-year-old plant are not manufactured in Nigeria or Korea. We have to go to Japan because the machines are made there.

“Scarcity of dollars has grossly contributed to the poor development of the plant because sourcing for dollars remains a mirage.’’

He said that Egbin Power was indebted to banks to about $320m. He said that the money was borrowed to rehabilitate the plant and purchase equipment to put the plant in good shape to generate at higher level.

The Egbin boss said that when the power generating companies took loans from  local and international banks to acquire the electricity plants, the foreign exchange rate was about N157 to one dollar.

Peavey spoke during the company’s scholarship award programme to schools within Ijede community in Lagos, appealing to government to pay its debt to enable the company to carry out its operations.

“We have a total generation output of 1,320MW but currently we are generating just 425MW which is 30 per cent of what we should be generating,’’ Peavey said.

He said that other than gas, the company was considering using other sources of power generation such as low pour fuel oil.

He said that the major challenge confronting the plant was gas scarcity.

“ Another big problem is that of over N86bn being owed by federal government on energy produced to the national grid in the last six months, we only got 16 per cent of the total bills out of the total money for energy generated to the national grid,” he said.

“The amount is the money owed by government through the Nigerian Bulk Electricity Trading (NBET) to produce power to the grid by generating companies.’’

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