Nationwide blackout looms over N601bn debt owed investors

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By Adewale Sanyaolu

Stakeholders have warned of a looming nation wide blackout soon over latest reconciled N601 billion debt profile owed operators across the power sector value chain.
The N601 billion debt is owed generation, distribution and transmission arms of the power sector, excluding gas producers.
The stakeholders spoke at the Nigeria power panel session at the ongoing Nigeria Oil and Gas Conference (NOG) 2017, which began in Abuja yesterday.
Managing Director and Chief Executive Officer of Mainstream Energy Solutions Limited, Mr. Lamu Audu, regretted that only 20 per cent of the energy value chain is being paid for.
He explained that the forex challenge remained a major bottleneck for power investors giving the fluctuating exchange rate, which was less than N200 to a dollar when the assets were bought, but is currently above N350 at the moment.
“Virtually all the spare parts used in the power sector are imported, and we need foreign exchange to procure them. But, unfortunately, the fluctuating exchange rates have made planning difficult for investors,’’ he said.
Audu disclosed that another worrisome trend in the sector is the issue of ageing transmission infrastructure, which most times leads to rejection of generated power by the Transmission Company of Nigeria (TCN).
“This is a major loss on the part of power generation companies. When this generated power is rejected, who bears the loss? I think government should be in a position to pay for this. And going forward, I think TCN should be privatised,’’ he advised.
On his part, the Managing Director of Sahara Power, Mr. Kola Adesina, lamented that the paucity of funds for power investors remained a stumbling block to its growth.
Adesina said the power sector, being a cycle, feeds from four sources – gas, generation, transmission and distribution – stating that when one leg is starved of fund, all other sectors are affected from functioning at optimal level.
He said the inability of consumers to pay for power consumed ultimately affects payment to gas producers, gencos and the transmission firm.
On the other hand, he said lack of adequate supply to the generating companies is also a major issue hindering the smooth operation of the sector, adding that constant attacks on gas infrastructure by agitators remained an issue that government must address for the sector to move forward.

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