Power generation companies (Gencos) in Nigeria have listed six conditions that must be met by the federal government or they shut down their operations.
The conditions listed below are coming after the distribution companies (Discos) kicked against the FG’s selection of the Transmission Company of Nigeria (TCN) to manage the N72 billion financial investments it intends to inject into the distribution network nationwide.
- The immediate payment of the outstanding balance due to them under the N213 billion Nigeria Electricity Market Stabilisation Facility (NEMSF) created by the Central Bank of Nigeria (CBN) in 2013.
- The federal government must pay them the outstanding balance for power generated as at January 2015 before the Transition Electricity Market (TEM) took off, as well as outstanding invoices for power supplied to the grid between February 2015 and December, 2016 with accrued interests.
- Capacity payments for the period February 2015, to date, payment for deemed capacity for the period 2013 to date, and the setting up of an effective financing plan which would kick off after the completion of the N701 billion assurance facility set up by the government to sustain payments of invoices until 2021, when the government estimated the power market would be self-sustaining.
- FG and relevant stakeholders need tackle the operational inefficiency and liquidity challenges plaguing the entire value chain and making the sector unattractive for investment
- Payment of the outstanding for January 2015 (invoice unpaid with Market Operator before TEM); outstanding/unpaid invoices from February 2015 to December 2016 with accrued interests; payment for available capacity for the period 2015 February to date; payment for deemed capacity for the period 2013 to date;
- Put in place an effective financing plan to kick in upon the exhaustion of the N701 billion payment assurance facility to sustain payments of invoices till 2021, when federal government projects that the NESI would be self-sustaining,” the statement said.
- The federal government need to provide them with World Bank Partial Risk Guarantees (PRGs) supported by sovereign guarantees from Nigeria as promised at the inception of the power sector privatisation exercise.
- An obvious need for substantial additional investments and funding to develop the NESI and put the electricity market on the right growth trajectory.