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Insolvency killing power sector in Nigeria – Senate

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Senate Committee on Power has declared Tuesday, that insolvency is killing the power sector as various Ministries, Departments and Government Agencies alone, are owing the DISCOs, the sum of N98 billion .

This is as the Niger Delta Power Holding Company (NPHC), lamented non payment of N190 billion worth of electricity it generated from our power plants to the National Grid.

Specifically, the Chairman of the Committee, Senator Gabriel Suswam ( PDP Benue North East ) , at the end of three day investigative public hearing on Power sector, , said lack of liquidity or better put, insolvency, is killing the sector.

“The problem in the sector is insolvency. The discos are unable to collect money from MDAs, owing about N98 billion now aside the ones owed by individuals.

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“There are alot of issues and those issues must be aligned. And that is what we’re trying to do in this public”, he said.

He added that lack of coordination among key players in the Sector , was also part of the problem.

He said : “We have listen to presentations from the government side and the operators and we have seen that there is no alignment anywhere and that is the problem.

“The blame game among them has to stop. Once there is an alignment and proper coordination, that yes, if we generate 13,000 megawatts, and transmission is able to transmit at least 10,000 megawatts, and discos are able to absorb the 10,000, and there is proper tariff, it makes the sector solvent.

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“Once there’s money in the sector, the other potential investors will come in. The banks will be able to also put in more money, so that the sector will begin to run on its own.

“But where we are now, it will be unthinkable that government will stop providing the intervention. Once that stops, everything will collapse”

In his submission at the Public Hearing, the Managing Director of Niger Delta Power Holding Company ( NDPHC), Mr Chiedu Ugbo, said over N190billion is being owed the company for electricity generated .

He said:’The overarching challenge for NDPHC is the low market remittance leading to
huge indebtedness to NDPHC.

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“As at May 31, over N190billion was
owed to NDPHC for electricity generated from our power plants to the National Grid.

“The breakdown of the indebtedness is as follows: Legacy debt period: 2011 – 2013 N24,488,365,072.
Interim Rule Period: 2013 – 2015 N6,796,473,564.
TEM (NBET) : 2015 – 2020 N281,101,92,728.
SUB-TOTAL N312,386.741.364.

“less payment to gas suppliers: N119,393.845,935.

“This amounted to a total of N192,992,895,429 owed NDLHC.”

Ugbo also listed regulatory issues affecting the NDPHC to include the provision of low tariff to its generating stations compared with other thermal stations in the country.

“NDPHC’s tariff is fixed at N18.4
per KWh as against N24 per KWh for by other Independent Power Plants(IPPs).

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