N601Billion Debt: Nationwide Blackout In Sight

By Ikenga Chronicles February 28, 2017

N601Billion Debt: Nationwide Blackout In Sight

Nigeria could be set for a nationwide blackout over the N601 billion debt owed operators across the power sector value chain. Stakeholders gave this warning during the Nigeria power panel session at the ongoing Nigeria Oil and Gas Conference (NOG) 2017, which began in Abuja yesterday.The N601 billion debt cuts across generation, distribution and transmission arms of the power sector, excluding gas producers.

Managing Director and Chief Executive Officer of Mainstream Energy Solutions Limited, Mr. Lamu Audu, regretted that only 20 percent of the energy value chain is being paid for.

He blamed the shortage of  Forex and the fluctuating exchange rate, which was less than N200 to a dollar when the assets were bought, but is currently above N350 at the moment.

“Virtually all the spare parts used in the power sector are imported, and we need foreign exchange to procure them. But, unfortunately, the fluctuating exchange rates have made planning difficult for investors,’’ he said.

Audu disclosed that another worrisome trend in the sector is the issue of ageing transmission infrastructure, which most times leads to rejection of generated power by the Transmission Company of Nigeria (TCN).

“This is a major loss on the part of power generation companies. When this generated power is rejected, who bears the loss? I think government should be in a position to pay for this. And going forward, I think TCN should be privatised,’’ he advised.

Also speaking,  the Managing Director of Sahara Power, Mr. Kola Adesina, lamented that the paucity of funds for power investors remained a stumbling block to its growth.

Adesina said the power sector, being a cycle, feeds from four sources – gas, generation, transmission and distribution – stating that when one leg is starved of fund, all other sectors are affected from functioning at optimal level.