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Combined debts of N136.4b hobbling Olorunsogo, Egbin power stations, darkness looms

Less than two day the operators of Olorunsogo Power Plant in Ogun State has traced their technically moribund status since inception to the debt of N26.4 billion owed it, Egbin Power Plc, has warned that the country is heading towards another blackout as liquidity, poor transmission, gas supply and a debt of N110bn now stand between Nigeria and darkness.

Managing Director/Chief Executive Officer of Pacific Energy Company Ltd, operator of the Olorunsogo plant, Monsuru Afinni, in an interview revealed that a debt of N26.4 billion owed it by the Nigerian Bulk Electricity Trading Plc (NBET) and the Market Operators (MOs) are culpable in the emerging darkness.

According to Mr. Dallas Peavey, managing director of Egbin Power Plc, the plant was being forced to gradually shutdown due to adverse effect of grid instability that endangers its turbines.

He disclosed that Egbin Power Plc, the largest power generation company in Nigeria, is indebted to banks, gas producers and Korean Electricity Power Company (KEPCO) to the tune of N110bn.

Currently, Egbin doubles as biggest single power generating station in Africa with an installed capacity of 1320 megawatts consisting of six units of 220MW each.

Peavey noted that inadequate gas supply to generate at optimal capacity as well as the huge debts owed the company by federal government owned Nigerian Bulk Electricity Traders (NBET) and Market Operator are posing serious threat to the plant operations.

He averred that Nigeria’s electricity supply may get worse in the coming weeks as liquidity, transmission and gas supply issues are threatening the operation of its biggest power station, Egbin.

Peavey added further that “Egbin power plant is one of the biggest single power generating stations in Africa, with an installed capacity of 1320 MW consisting of 6 units of 220MW each”.

“Following the conclusion of the government’s privatization exercise in November 2013, the consortium formed by the partnership between New Electricity Distribution Company and the Korean Electric Power Corporation (NEDC/KEPCO) acquired Egbin Power plc,” he said.

“We owe gas companies, technical partners (KEPCO) and our lenders. We have made massive investments in making the plant readily available to generate electricity sustainably but unfortunately, we can’t break even due to the gross inefficiency in the value chain.

Continuing, Egbin Power boss argued that “The government guarantees to pay us for every megawatt we generate and sell to NBET but they have not done that. We just got paid for the month of December, 2016, three months later and we were only paid a paltry 28 per cent out of the total 100 per cent of the verified and accepted invoice for that month”.

“That is how the outstanding debts kept accumulating for three and half years now.’’ He also said that eventually these unbearable business operating circumstances and conditions will shut us down any moment if it persists. “That is the simple but bitter truth. On transmission the company had reached 1,100 MW while the installed capacity is 1, 320 MW.

“The grid could not take the power because of the capability issues within the Transmission Company of Nigeria system. We are constrained and limited to generate about 350MW daily due to both TCN system operations and inadequate gas supply issues.

“So, 70 per cent of our output is lost because available power can’t be evacuated. When you get good news from TCN that you can increase your generation, we will be faced with not enough gas and when there is gas, you have TCN issues. So, you have one, you don’t have the other.

“Let me be honest, if Egbin fails, it’s going to be dark as Egbin provides close to 30 per cent of Nigeria’s power, so let the required intervention be completed and urgently too, however, the Egbin turbines are ready to light up Nigeria,” Peavey revealed.

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