Power sector investors express frustration over N610bn debt

Power sector investors have warned of a looming darkness that may envelop the country soon over N601billion debt profile owed operators across the entire power sector value chain.

The N601 billion debt figure are owed to generation, distribution and transmission arms of the power sector, excluding gas producers.

The stakeholders spoke at the Nigeria Power Summit at the ongoing Nigeria Oil and Gas Conference (NOG) 2017 which began in Abuja on Monday.

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

He explained that the forex challenge remained a major bottleneck for power investors as a result fluctuating exchange rates, which was less than N200 to a dollar when the assets were bought, and 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 rates of exchange rates has 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 time 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 these generated powers are 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 privatized,” he advised

On his part, the Managing Director of Sahara Power, Mr Kola Adesina, lamented that the paucity of funds for power investors remained a stumbling block the 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 stifled of fund, all other sector are affected from functioning at optimal level.

He said the inability of consumers to pay for power consumed ultimately affects payment to gas producers, gencos and the transmission firm.

On the other hand, he said lack of adequate supply to the generating companies is also a major issue hindering the smooth operation of the sector, adding that constant attacks on gas infrastructure by agitators remained an issue that government must address for the sector to move forward.