Why Nigeria’s power sector privatisation is not working – GENCOs
Electricity generation companies in Nigeria, GenCos, on Sunday, blamed the federal government for the current poor state of the privatised power sector.
Mrs Ogaji told PREMIUM TIMES the governing contract agreements reached with BPE prior to the takeover of the power industry in November 1, 2013, include guidelines on how to make electricity generation and supply in the post-privatisation era sustainable and effective. The guarantee was to give assurance to banks willing to finance the acquisition of the power plants, without which the business would be infeasible.Following the privatisation exercise, Mrs Ogaji said the former Power Holding Company of Nigeria was unbundled into six GenCos and 11 distribution companies , and sold to core private sector investors.
“The non-provision of the securitisation for payments has encouraged multiple defaults on invoices for power supplied to the national grid and with zero consequences for such defaults,” Mrs Ogaji said. “The maximum capacity attained by the national grid ever is 5,375 MW as opposed to the current overall average available capacity, 8,589 MW, and installed capacity of 13,427 MW, with an expansion capacity of 20,000MW in an enabling environment.”Stranded generated power that could have been made available to Nigerians in the light of maximum attained grid capacity is an average of 3,214MW.
The GenCos also called for the review of the Electric Power Sector Reforms Act , the Multi-Year Tariff Order by the Nigerian Electricity Regulatory Commission as well as market rules and other governance documents in the electricity sector.
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