The Nigeria Bulk Electricity Trading Plc (NBET) owes eight Generation Companies (GenCos) built by the three tiers of government, over N190 billion in debt for energy generated and supplied to consumers on the national grid.
There are 10 National integrated Power Projects (NIPP) GenCos developed by the Niger Delta Power Holding Company (NDPHC), the special purpose vehicle. While the Federal Government owns 47 percent shares in the company; the States have 35 percent stake and the Local Governments have 18 shares.
According to a report obtained from NDPHC, the company said the firm no longer has annual budgetary appropriation approved by the National Assembly, but relies on the revenue generated from the eight operational GenCos.
The company said the core challenge for it is the low market remittance leading to huge indebtedness to NDPHC by NBET. “As at May 31, 2020 over N190 billion was owed to NDPHC for electricity generated from our power plants to the national grid,” it said.
The firm said the operational plants have 4,047.3 megawatts (MW) capacity but that the regulatory authority had lowered the tariff at N18.4 per kilowatt hour (KWh) as against N24/kwh paid to other GenCos.
The breakdown of the debt shows that the NIPP GenCos were owed N24.5bn as legacy debt from 2011 to 2013; during the Interim Rule Period of the electricity market from 2013 to 2015, another N6.8bn debt mounted.
From 2015 to 2020 the Transitional Electricity Market (TEM), NDPHC said NBET owed N281.1bn debt for the NIPP GenCos’ energy, resulting in a total debt of N312.4bn.
However, it said, through the Federal Government’s intervention with the Payment Assurance Facility (PAF) initiative from 2017, NBET cleared N119.4bn of the debt but that N193bn was outstanding since last month.
“The various interventions by the FGN are intended to reduce this indebtedness principally owed by NBET,” it noted.
To end the era of piling debt for the GenCos by NBET, the company advocated for bilateral energy trade with Eligible Customers, so the GenCos can sell energy to willing customers without NBET being the intermediary.
