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N1.66trn debt: GenCos battle to pay workers’ salaries

 

 

Power generation companies (GenCos) operating in the country are struggling to meet their financial obligations to workers on account of the harsh economic climate in Nigeria, New Telegraph has learnt. It was gathered that some of the companies were unable to pay salaries as at when due.

 

New Telegraph authoritatively learnt that the full weight of the economy is not only bringing itself to bear on the operation of companies in the sub-sector, but also expected to linger for sometime.

 

This happens as the generation companies achieved their peak on November 20, this year, when they generated 5,079 megawatts (Mw) of electricity, a figure, which is believed to be the highest so far in recent times.

 

Though the electricity distribution companies (DisCos ) could not pick all the power generated due to some industry related issues, the fact re-

 

mains that the GenCos achieved optimum production during that period. Apparently confirming the issue, the Executive Secretary, Association of Power Generation Companies ( APGC), Dr Joy Ogaji, said the companies were facing serious financial crisis due to N1.66 trillion debts, which the Nigerian Bulk Electricity Trading Company (NBET) is owing them.

 

APGC is the umbrella association for electricity generation companies in the nation’s power sector. She said that the issue was taking its toll on activities in the subsector, as generation companies are struggling to survive. Asked the efforts NBET is making to repay the debts, she said that there was no sign NBET would pay its debts before the end of December, 2021.

 

According to her, GenCos are yet to be informed about the plans being made by NBET to offset its debts. “What I can only say is that the companies are still generating electricity.

 

 

Though some of them are owing salaries to add to the growth of the sector, the signs are not there that GenCos would get their money as December is inching close to an end,” she added. The debt, she said, was increasing every year, stressing that failure by NBET to pay part of the debt means that it will increase beyond N1.66 trillion.

 

Apart from the fact that the firms are unable to meet their obligations, by purchasing materials needed for electricity generation in the country, they are also facing problems such as increase in the rates of inflation and its attendant consequence on the cost of goods and services in Nigeria.

 

The issue has compounded the woes of the firms, as they can not operate optimally.

 

Ogaji said: “If, for instance, I bought an item for between N100 to N200 yesterday, and the price increased to N300 or more the following day, the development suggests that I should look for more money, in order to be able to buy the product, if truly I need the product for Recalled that NBET is owing generation companies N1.66trillion debts as charges for the ‘deemed capacity’.

 

Deemed capacity is the capacity that should have been delivered, but for the system operator’s instructions to GenCo to derate or reduce its capacity to achieve grid balance and stability.

 

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