… We’re working to clear liabilities –NBET
By Adewale Sanyaolu
Nigeria’s power generation companies (Gencos) recorded about N31.7 billion revenue shortfall in the month of May due to the failure of Discos to pay commesurate invoices and shortfall in the N701 billion Federal Government intervention fund by Central Bank of Nigeria.
According to statistics from the Nigerian Bulk Electricity Trading Company (NBET), Gencos invoices sent to the bulk trader for the month of May was N44.47 billion, while actual payment made to them was N12.77 billion, representing about 71.29 per cent shortfall.
The Association of Power Generation Companies (APGC), said the arrears of debts owed to Gencos by NBET is over N500 billion.
However, NBET’s failure to clear its debt liabilities has been a source of concern to APGC members who are constantly under threat from gas producers.
The development has left a lacuna in the gas-to-power value chain as investments appear stunted with several gas fields lying idle several years after investors received licences for their development.
In the month under review, NBET submitted a total invoice of N40.78 billion to Distribution Companies (Discos) for power purchased for onward supply to homes and offices, but was paid N12.56 billion representing 30.81 per cent, leaving a shortfall of N28.21 billion or 69.19 per cent owed by Discos.
Further breakdown of the payments put the Abuja Disco as the highest performer, with N5.232 billion invoice and paid about N2.093 billion. Ikeja Electric followed with a payment of over N1.831 billion or 40 per cent out of about N4.579 billion invoice received, while Kano recorded the lowest payment performance with 13.9 per cent with invoice value of about N2.873 billion but paid only N400 million.
But when contacted, Head of Power Procurement and Power Contract at NBET, Mr. Yesufu Longe Alonge, explained that low payments from Discos to NBET remained responsible for the revenue shortfall to Gencos.
He said the power sector is a chain where Discos buy power from NBET, even as power is equally received from the Gencos. He said complaints from the Discos that the tariff charged consumers was not cost-reflective has made it impossible to pay NBET the full value of invoices sent to them.
On the other hand, Alonge said the N701 billion intervention fund approved by the Federal Government was only released to NBET for the months of January and February – but that until the CBN finalises the arrangement with the intervention fund, the challenges of revenue shortfall would likely not abate.
Alonge said the plan of NBET and government was to ensure that 80 per cent of invoices sent by Gencos is paid them, explaining that limited resources at the disposal of NBET have made that impossible.
“For the first two weeks in May, we ensured that Gencos were paid 80 per cent because we received part of the intervention fund while we augmented the balance with funds from our coffers. But since we are yet to get additional funds from CBN, we cannot continue with that arrangement for now due to limited resources.