GenCos cry out over N3.7trn debt

The Power Generation Companies (GenCos) has stated that over N3.7trn debt owed to generating companies is threatening their operations.

In a statement signed by Col Sani Bello Rtd on behalf of Power Generation Companies (GenCos), the situation if not quickly resolved may lead to the total collapse of electricity generation in the country.

The GenCos noted their operating capacity has been reduced due to liquidity crises among many others.

“GenCos are currently owed over two trillion Naira for power they generated, put onto the national grid, and consumed by end users. This is in addition to the over N1.7trillion naira, funding gap created in the recent supplementary MYTO order 2024 without a designated fund to fill the gap. This huge debt outlay is now greatly inhibiting GenCos ability to meet their obligations to lenders, O&M operations, necessary maintenance, spare parts procurements, and employee-related obligations etc,” it said. 

The posited that there is a need for a coordinated approach by all stakeholders in the NESI to address the liquidity issue realistically and sustainably in the power sector so that Nigerians can have access to reliable electricity supply.

They further called for immediate and expedited action to be taken to prevent national security challenges that may result from the failure of the GenCos to sustain steady generation of electricity for Nigerians.

“In view of the foregoing, we hereby demand the following to URGENTLY put GenCos in a position to continue generating power: Immediate implementation of payment plans to settle all outstanding GenCos invoices, in line with their PPAs; Reprioritization of payments under the waterfall arrangement to give full priority to a hundred percent payment of GenCos’ invoices as at when due; a clear financing plan to backstop the exposures in the NERC’s Supplementary Order to the MYTO and the DRO 2024; Provision of payment security (guarantees) backed by World Bank/AFDB to guarantee full payment to GenCos, to enable them to meet their critical needs, improve generation to Nigeria and implement their respect growth and expansion plans,” the statement added.