The Federal Government has disclosed through its Power Sector Recovery Programme document that Nigeria is losing $25 billion (N7.5 trillion at the current exchange rate of N305 per dollar) yearly due to irregular electricity supply.Besides, accumulated power sector cash deficits from January 2015 to December 2016 amounted to N931billion ($2.9 billion).
This is the total amount underpaid by all the distribution companies (Discos) to Nigerian Bulk Electricity Trading Plc (NBET) for invoices submitted to each Disco for electricity delivered to their distribution networks. It includes losses incurred by the companies due to lack of a cost-reflective end user tariff.
Among many ailments that dogs the sector, the vandalism of oil and gas delivery infrastructure has also shut down gas production, resulting in another 2,900MW of constrained generation.To ameliorate the situation, the $1 billion would be expended to NBET to ensure Generation Companies (Gencos) and gas suppliers are paid 100 per cent notwithstanding any shortfalls from the Discos.
The Executive Secretary of the Association of Power Generation Companies, Dr. Joy Ogaji, said that generating plants could no longer receive revenue that does not cover operating costs. She stated: “History has shown in the past three decades how generating plants were run right to the ground by the defunct National Electric Power Authority /Power Holding Company of Nigeria without paying attention to scheduled maintenance and overhaul.
“This new breed of determined operators have continued to maintain standards by increasing their national generation capacity without being paid rightly for their services. It is only a matter of time for them to run out of funds to maintain the generation capacities and also to produce the much-needed energy for the nation.”
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