In this interview with OKECHUKWU NNODIM, the Executive Secretary, Association of Power Generation Companies, Joy Ogaji, says Gencos are currently facing difficult financial situation, having been forced into signing a number of obnoxious agreementsCritical to the reform in the power sector and with the increasing need to drive private sector investment in the sector, the Federal Government established the Nigerian Bulk Electricity Trading Company as a public liability company.
With this renewed confidence for investors and the promise to provide incentives, and the needed comfort by bearing the off-take market and default risks such as liquidity/payment risks, the Gencos with a strong patriotic zeal invested in the power sector. The Gencos are above all odds keeping to the terms of their contract, which include generating power in anticipation of the 100 per cent payment promised in the Transition Electricity Market.
As if that was not enough, NBET is at it again, this time mandatorily issuing an arbitrary and unilateral decision, which should not be possible for a market licensee. NBET, on 13th September, 2019 issued a letter to individual thermal Gencos directing them to obtain, as a matter of urgency, their respective board approvals or resolutions, bequeathing responsibility for payment of gas and transportation to the respective supply companies for an administrative charge of 0.75 per cent.
This is because of the 15 per cent received from the market, about nine per cent must be allocated to gas as pro-rata payment. This is certainly not sustainable as it is unfathomable that any going concern gets paid only 15 per cent of its invoices and yet be expected to perform within the requirement of the performance and other relevant market agreements entered into.
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