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Electricity: GENCOs demand payment before supply

The 13 electricity generation companies, (GENCOs) yesterday issued fresh conditions to the federal government for the nation to have stable electricity generation.
Part of the conditions, in a document obtained by Daily Trust their lawyer, Adeniyi Aderigbonmire on behalf of the companies include confirmation of a plan for 100 per cent payment of all outstanding indebtedness and interests due to the GENCOs for electricity supplied and ancillary services provided by them, 100 per cent payment of all invoices to be submitted by GENCOs under the payment assurance program, payment of all sums due as capacity charge to the GENCOs from 2013 till date.
Others are non-admission of any additional beneficiary into the ₦701 billion assurance facility without corresponding increase in the facility amount, payment of the balance of ₦213 billion from CBN Electricity Market Stabilization Fund as well as provision of Sovereign Guarantee and/or partial risk guarantee for all payment obligations to GENCOs.
The GENCOs said failure to pay them their entitlement for electricity generated which have since been consumed by consumers in the country has continued to have huge negative impact on them and their power plants such that their corporate existence has come under and remains under severe threat.
The total amount owed the GENCOs for electricity generated and supplied by them is approximately N800 billion. Together with capacity and interest payments due to them, the GENCOS are owed in excess of N1trillion.
At a meeting held on February 14 2018, in Abuja with the Minister of Power, Works and Housing, Babatunde Fashola, and NBET Chief executive officer, Dr. Marilyn Amobi, the generation companies expressed concerned over government’s commitment to promptly paying Azura and Accugas 100 per cent of their respective invoices while the GENCOs generating about 80 per cent of the power being consumed in Nigeria continue to be owed huge debts for which they get paid only 80 per cent of their invoices in an irregular and undeterminable manner.
The step, the operators said would automatically deplete the insufficient facility and further get the GENCOs closer to shutting down operations adding that, overall, the FG intends to pay Azura and Accugas a total of $373,492,398.00 from the N701 billion facility.
They are also worried that such discriminatory practices appear to be enjoying the tacit endorsement of the World Bank, which has International Finance Corporation (IFC) as an investor in Azura, and could unduly influence decisions to protect their interests to the detriment of the entire power sector”, one of the top executives told Daily Trust.
The 13 power companies are Mainstream Energy Solutions Limited, Transcorp Power Limited, Egbin Power Plc, Northsouth Power Company Ltd, First Independent Power Limited, Shell Petroleum Development Co. Ltd, Geregu Power Plc, Sapele Power Plc, Pacific Energy Limited, Afam Power Plc, Ibom Power Company Limited, Omotosho Power Plc and Niger Delta Power Holding Company, all with combined generation capacity of over 7,000MW

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