‘How GenCos battle liquidity problems’

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The power generation companies (GenCos) are finding it difficult to get loans from banks for their operations, the Association of Power Generation Companies (APGC) Executive Secretary, Dr Joy Ogaji, has said.

She said banks are not ready to provide loans to the firms because, they would not pay back.

She said the development made  the firms to seek payment  for electricity generated and supplied to the power distribution companies(DisCos).

In a chat with  The Nation, Ogaji said the controversy among the operators in the industry, had complicated the problem of the GenCos.

Ogaji said: ‘’The Nigerian Bulk Electricity Trader (NBET) is accusing  the DisCos of not paying for the electricity it is supplying to them, while the DisCos are also blaming consumers – residential, commercial, and industrial concern, including  ministries,departments and agencies (MDAs) for owing them. This has compunded the woes of GenCos in the country.”

On the other hand, Ogaji explained that the GenCos are not ready to produce more electricity, because they know it would not be paid for. “How do you expect GenCos to pay back the loans they collected from banks and workers’ salaries in this kind of situation?” she asked. She said GenCos, also incur losses they are not ready for in the course of generating electricity.

She said losses are incurred in areas such as transportation of gas from the marketers to the thermal plants, storage of electricity, among others.

According to her, the development is sending a signal that the country would be in darkness, if urgent measures are not taken to avert it.

She said gas marketing firms  are shutting down supplies,because  generation companies cannot neither pay for product, nor pay salaries of their workers.

She said owing to liquidity squeeze in the sector, most of the generation companies to maintain their machinery,  owe salaries and are laying off their staff.

She urged the Federal Government to hold the DisCos accountable to  the agreement, they signed with  the Federal Government during the period of privatisation of the sector in 2013.

She said, by so doing, the DisCos  would fulfil  their own part of obligations, among performing other roles that would help in moving the sector forward.

He said wheh this happens, the  DisCos would would be able to meet their financial obligations to the GenCos among others in the value chain.

She noted that when the generation companies were invited to buy the assets of Power Holding Company of Nigeria(PHCN), by   the Federal Government, the firms were assured that they would not have any problems.

Ogaji said, few years after the privitisation, the GenCos are having problems meeting their obligations.

This, she said, is having a spiral effects on the industry, noting that  operators have been affected by the development.

She advised  the Federal Government to provide a holistic method of solving the problems in the sector, stressing that solving one part of the problem and leaving the other unsolved would not augur well for the sector, which is struggling to survive.

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