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Akinwande Soji-Ojo
Minister of Power, Chief Adebayo Adelabu, has said the federal government is tackling all the problems in the electricity value chain in the country.
Adelabu made the disclosure at a recent press briefing, in Abuja.
The minister noted that there are simple, technical and operational problems across all segments in the electricity supply value chain, adding that the problems are complicated by lack of sustaining liquidity and infrastructural funding as well as structural misalignment within the sector.
“The simple, technical and operational issues are shortage of gas supply, aging and dilapidated machineries causing supplies below optimal capacity utilization leading to short supply by Gencos, inadequate power evacuation facilities at Genco locations coupled with unstable and fragile transmission lines devoid of automated frequency controls and lacking in fail over or back up capacity with frequent human disturbances through vandalization and theft,” he said.
Adelabu explained that the economic life cycle of electricity–production, transmission and delivery, must have a continual life cycle for citizens to enjoy reasonable supply of electicity.
“The continuity is only guaranteed by the model upon which it is operated, which is pricing. Liquidity will not be a problem…the operators will have enough money for production, transportation and delivery. And when they want to do expansion, if they don’t have equity to go back and expand production, the value chain will be attractive to banks. Banks will give loans for expansion in terms of growing production. They will only do that because they can see a line of sight that the money they are putting in as lender will come back,” he said.
The minister, who lamented that the federal government is owing gas supply companies and Gencos over N3 trillion, said President Bola Tinubu’s administration is working round the clock to resolve all the issues in the sector.
“We are owing a total of N1.3 trillion to the power generating companies. Sixty per cent of it is being owed to gas suppliers.Today, we have a legacy debt prior to 2014 to the gas supply companies of $1.3 billion. At today’s rate, that is close to N2 trillion. If you add N2 trillion of legacy debts to gas companies’ to N1.3 trillion to the Gencos, we have an inherited debt of over N3 trillion in this sector. How would the sector move forward? What happened in Jaunary is that the gas companies that have been managing to supply gas to Gencos decided to ask for their money. They said they are not supplying gas until Gencos pay out of their outstanding debts,” he said
Adelabu, however, added that the problems are not insurmountable, stressing that he and his team have identified the source of the problems and are working to tackle the problems from the source.
“We are working underground to resolve these issues; that we pay out of these debts either through cash injections or gurantee debt instruments to ensure continuity in power generation,” he added.
The minister said that he and his team have come up with a sector-wide documented strategy and solution that did not leave any player in the power sector out.
He appealed for patience from Nigerians, promising that the power sector will witness the desired improvements very soon.