GenCos warn of severe power outages without debt payment

The Power Generation Companies (GenCos) have issued a stark warning to the Federal Government, highlighting the urgent need to settle outstanding electricity debts that jeopardize their operations.

Retired Col. Sani Bello, the Board Chairman of GenCos, emphasized the gravity of the situation in a recent statement.

“GenCos are constrained to issue this release to draw the attention of the Federal Government and key stakeholders to the need to urgently address the issue of inadequate payment for electricity generated by them and consumed on the national grid,” Bello stated.

“GenCos are currently owed more than two trillion naira for power generated and consumed, alongside a 1.7 trillion naira funding gap from MYTO 2024,” Bello stated.

This financial strain significantly impairs their ability to manage operations, procure essential parts, and meet payroll obligations.

The liquidity crunch is further aggravated by the NESI payment waterfall policy, which deprioritizes GenCos in the payment hierarchy, contrary to the terms of their PPAs.

Failed attempts to secure international financial support due to unmet performance indicators by other market participants have also compounded their challenges.

Bello highlighted the necessity of a stable foreign exchange window for GenCos, given the dollarized nature of their major expenses.

He called for a coordinated effort among all NESI stakeholders to realistically and sustainably resolve the liquidity issues, ensuring uninterrupted power supply for Nigerians.