Nigeria Set For Immediate Total Power Blackout, As Buhari Abandons Fashola

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Following the inability of the President Muhammadu Buhari-led government agencies to pay their electricity consumption debt, hovering N156 billion, the Electricity Generating Companies of Nigeria, GenCos, have threatened to shutdown their power plants, as a way of protest.

‎According to news reports, the investors who bought the six power generating companies unbundled from the State firm, Power Holding Company of Nigeria, PHCN, ‎decried the ‎lackadaisical attitude of the government agency’s deliberate refusal to offset their debt worth $‎485 million (N156 billion).

With commercial banks ‎recalling loans advanced to them, the GenCos in a joint statement on August 10, disclosed that it will proceed in shutting down its power plant any time soon, unless government retracts its step, and pays their outstanding bills, in order for them to improve on gas supplies.

‎‎The GenCos which include, Transcorp’s Power and Forte Oil’s Power, noted that ‎they struggled to maintain their equipment, because of the devaluation of the naira, which have made spare parts to triple in price at the international market.

It said, ‎”In 2013, when we bought the power plants, exchange rate was N150 per dollar.

“Today it is N310 per dollar. How can we repair, equip, acquire new turbines at this rate of N310 per dollar, and yet still operate with an old tariff?

“A shutdown is, indeed, imminent,” they said.

However, the Minister of Power, Works and Housing, Babatunde Fashola, is yet to react to the threat by the GenCos.

‎The Federal Government had paid N186.7 billion with the Central Bank of Nigeria, CBN, intervening with the provision of N213 billion loan to keep the system afloat, but the consistent fall in the naira, both at the inter-bank and parallel market, have made nonsense of those palliatives.

‎Presently, the naira has lost over 40 percent of its value, since Nigeria ditched its 16-month-old peg of N197/$ in June, in a bid to lure back foreign investors who fled both the equities and bond markets, after the plunge in crude prices.

During privatisation of the PHCN assets, the Federal Government had pledged to review tariffs, in a bid to allow more people to come and invest, and upgrade ‎the transmission network. However, tariff reviews have not kept pace, with rising cost worsened now by the naira devaluation.

As at February this year, the ‎Nigerian Electricity Regulatory Commission, NERC, had increased tariffs by 45 percent, triggering protest from consumers, already under pressure from rising inflation, which hit a 10-year high in June.

‎Despite its implementation against court orders, the tariff increase has not been enough to cover their fixed cost, the generating company said.

Based on their record, ‎as at last month, the generating firms have received only 28.6 percent of their April invoices.

With the current development, financial experts have begun ‎to wonder when the nation will ever get it right, as the nation requires not less than 40,000 MW of electricity to serve its over 170 million population.

Currently, Nigeria is battling to keep pace with 4,000 MW of electricity.

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