Environment
Electricity Crisis: GenCos Blame N1.64trn Debt for Low Power Supply
By Joseph Amah, Abuja
As the energy crisis facing the country deepened at the weekend, power generation companies in Nigeria (GenCos) have attributed the low electricity generation to the national grid to the N1.644 trillion owed them by the Nigerian Bulk Electricity Trading Plc.
The GenCos which spoke under the aegis of the Association of Power Generation Companies (APGC) said the amount which came as a result of unused capacity dates back to 2015. Speaking to journalists in Abuja, APGC Executive Secretary, Dr. Joy Ogaji accused NBET of failing in its obligations to the GenCos as contained in the Power Purchase Agreements (PPA).Dr. Ogaji who gave a breakdown of the debts, said NBET owed the GenCos N214.
93 billion in 2015; N273.32 billion in 2016; N236.47 in 2017, N264.08 billion in 2018, and N256.97 billion, N266.01 billion and N120.25 billion in 2019,2020 and 2021 respectively. The figures were however disputed by NBET which claimed that not all GenCos were entitled to unutilized capacity payments.As the operators and the government agencies continue to bicker, power supply has remained abysmally low in the past three weeks. As at 5pm yesterday, national grid supply was just 1,393.40 Megawatts with only nine plants generating to the grid. Dr. Ogaji at the briefing explained that the huge debt was making it difficult for the power generation companies to operate and maintain their plants, stressing that if the debts were paid, the GenCos could generate 9,000MW immediately.
According to her, the “illiquidity caused by the huge sums owed GenCos by NBET, has more than ever before continued to frustrate the GenCos and kept them incapable of meeting their obligations which are extremely necessary to keep their power plants running and make capacities available, while observing required Health, Safety and Environment (HSE) standards.
Such obligations include our operations and maintenance (O&M) as and when due, procurement of critical capital, spare parts and accessories, payment, and servicing of existing loans from lenders and financiers, employee obligations, etc. “Recently, GenCos cried out to the authorities and are still looking forward to a favourable consideration of their pleas for foreign exchange support to enable them to procure critical spares for their turbines and equipment to keep them in good state of repair. This is in addition to the FX challenges faced by the Hydros, whose concession fees are dollarized”.
She added: “Most of the electricity generated in Nigeria, about 80 percent, come from gas-fired turbines. Natural gas is the feedstock or fuel of these plants. GenCos have consistently been dealing with unending gas-related challenges which inhibit optimal generation. Issues of gas volume, gas quality, gas pressure and gas transportation have consistently curtailed capacity utilisation by GenCos thereby affecting generation.“These issues need to be addressed and urgently too, as the GenCos have always requested. Unfortunately, the unenforceable state of the contracts in the NESI (Nigerian Electricity Supply Industry) and the broken cycle of payment assurance have made the enforcement of what would ordinarily be basic obligations of parties to the industry agreements, impossible”.
In its reaction, NBET disputed the figures quoted by the GenCos, saying only companies with active gas supply and transportation contracts were paid for unutilized capacity. The Head Corporate Communication, NBET, Henrietta Ighomrore explained to Vanguard that in the country only five power generation companies with active Gas Purchase Agreement were paid for unused capacity. According to her, claims by Dr. Ogaji that the GenCos have the capacity to generate 9,000MW were not accurate as inspections by NBET have shown that the capacity does not exist.
She said: “On the issue of capacity payments, the contract documents are very clear on how it is treated. All GenCos get paid for the associated capacity on energy delivered to the national grid. Only GenCos with active PPAs get full capacity payment based on their active gas contracts. “You are well aware that active gas contracts are associated with the take and pay obligations, which come with more financial exposure and responsibilities. Nonetheless, the Regulator (NERC) has set in motion the process for partial activation of contracts in the sector, which was what necessitated the scheduled capacity test by NBET to various thermal plants around the country. “Although, we were not able to record full participation of all GenCos, as some were either not able or showed willingness. With a better understanding of the intent, we expect full cooperation of GenCos in subsequent capacity tests of their plants. It is important to ascertain the actual capacity of our generation network to enable better planning and efficient dispatch of power within the grid network”.
Ighomrore added: “The situation in the Power Sector right now is not one for name calling or blame game, neither is it one for fictitious data reporting. As you are well aware, the Federal Government via NBET has continued to deploy innovative solutions aimed at sustaining sufficient cash flow within the Power Sector especially payments to the GenCos to ensure they meet their immediate obligations and continue to meet and ramp up generation to the National grid”.
Environment
Prolonged Public Holidays Come with Negative Economic Effects on Citizens – Anambra Residents
Anambra residents have slammed the additional day approved by the Federal Government for the Muslim faithful to celebrate the 2024 Eid-Ei-Fitr, saying this will have negative effects on the economy.
The Federal government had early declared April 9 and 10 as Muslim-Ummah for the successful completion of a month’s spiritual rejuvenation.
Reports says that residents of Anambra capital city believe that the additional day which they did not plan for will result in economic hardship to the citizenry.
Most respondents believe that people had planned to resume their economic activities instead of wasting their time staying at home doing nothing..
Former Chairman, Awka Chamber of Commerce, Chief Felly Akosa, described the additional day to the two days approved earlier as “unfair to the economy of the country as people were unprepared for the additional day.
Akosa said that although it is right for the Muslim faithful to celebrate their holiday after a month-long fasting, the process needs to be carefully planned for in place of the additional rest day which could inhibit business activities.
Chief Damian Okeke-Ogene, National Vice President of Igbo Apex Social Cultural body, Ohanaeze Ndigbo, said the policy would cause huge economic waste as businesses are put on hold,
He advised that, in future, a proper and well planned programme needs to be in place before declaring a public holiday for any celebration that will be national.
“Our economy and other sectors are not very healthy,” and it would, therefore be appropriate to plan well to avoid declarations that will hamper the citizens’ welfare.
Mazi Christian Beluchukwu, a business man in Awka, described the extension of the Eid-El-Fitr public holiday to Thursday, April 11, as an added hardship for the citizenry.
Beluchukwu said that any public holiday for three days, April 9 to 11, to celebrate any feast in the country is an economic loss to the nation.
He said that it was best to stick to the two-day national public holidays as this gives room for the people to plan their activities very well.
He stated that his wife went to a public hospital on Tuesday and was unattended to because there was no doctor on seat to provide medical attention.
“She resorted to visiting a private hospital which cost extra money which the public hospital is expected to handle at a reasonable cost. (NAN)
Environment
World Bank Fund: Corporation Rehabilitates Treatment Plant, Reticulation in Jos South
The Jos Water Services Corporation (JWSC) has said that the World Bank fund received would be used to boost water supply to Bukuru and environs in Jos South Local Government Area.
Mr Apollos Samchi, the Managing Director of the corporation, said that N1.7 billion would be expended on the rehabilitation of water treatment plant, over head steel tank and laying of pipes to homes of consumers.
Samchi, who disclosed this on Friday in Jos, during a two-day capacity building workshop, said that the projects were expected to be completed in four months.
Reports says that the workshop organised for contractors has at its theme: “Implementation of Environmental and Social Management Plans for Projects in Jos South.
The MD said that the projects would ensure steady provision of potable water to residents in Gyel and Kurgiya in Jos South Local Government Area.
He said the treatment plant when rehabilitated would pump out 5,000 cubic litres of water daily.
The MD further stated that the reticulation exercise would cover residents who weren’t initially connected to public water supply in the area.
Samchi said that the essence of the workshop was to ensure that the contractors were trained to develop adequate measures and controls to minimise and mitigate potential environmental and social risks that could adversely affect the project implementation.
He called on all the contractors handling the projects to ensure that they adhered to the environmental and safety standards and deliver within the specified timeframe.
In his remarks, Mr Jonathan Malann, the Plateau Project Coordinator, Sustainable Urban, Rural Water Supply, Sanitation and Hygiene programme (SURWASH), also advised contractors to adhere to the environmental and safety standards as provided by the World Bank.
The Federal Government had received $700m financing from the World Bank to ensure that all its people have access to sustainable and safely managed WASH services.
The seven participating states are Plateau, Delta, Ekiti, Gombe, Imo, Katsina, and Kaduna.(NAN)
Environment
Erosion Control Project: Gombe SEC Approves N389m Compensation for Residents
The Gombe State Executive Council (SEC) has approved payment of N389 million as compensation for residents that would be affected by the gully erosion control project at Federal College of Education (FCE) Technical and its surrounding communities.
The Commissioner for Finance, Gombe State, Malam Mohammed Magaji, stated this at the end of the SEC meeting on Friday in Gombe.
Magaji said the payment, which would commence immediately, would be for individuals and organisations along the gully erosion site.
He said almost 1000 persons were expected to benefit from the gesture.
According to him, the compensation is part of the requirements of the World Bank, which specifies that such payments be made to property owners.
Magaji said the payment would also be made to ensure seamless resettlement of affected persons.
“The beneficiaries are in hundreds, almost a 1,000 people; there is compensation for houses, and also for business premises.
“There is also stipends for the elderly living around that area so that they are able to have good livelihood,” he said.
The commissioner for Education, Hajiya Aishatu Maigari, also said the SEC approved upgrade of the five mega senior secondary schools in the state to sustain improvement in the education sector.
Maigari said the upgrade would be carried out based on the needs of each of the schools.
She stated that infrastructure in some of the schools were already being upgraded to global standards.
“We have seen construction of toilets, installation of solar-powered light, construction of roads, school clinics, boreholes and many more,” she said.
The News Agency of Nigeria (NAN) reports that the state government had on Nov. 23 signed a N12 billion contract with Triacta Nigeria Ltd. for a 21-kilometre gully erosion control work in six communities within Gombe metropolis.
The project is under ACRESAL project, a World Bank-assisted project to address the challenges of land degradation and climate change in northern Nigeria. (NAN)