Stakeholders in the power sector are worried over epileptic electricity and the fact that the energy crisis is not showing signs of improvement. Investors and key stakeholders in the power sector have identified disjointed alignment in the industry as continuously causing hiccups in dedicated efforts to resolve the lingering energy crisis.
The financial sector is already reeling in high indebtedness by distribution companies which LEADERSHIP understood is above N819 billion at the start of the year.
Some banks have recently made frantic efforts to take over 60 per cent stakes in some power Distribution Companies (DisCos) from the core investors for failing to service their debts.
Close to a decade, no DisCo has declared dividend after privatisation, and are buying electricity assets with loans, misplaced priority according to some critics.
There are other key issues with N202 billion Ministries, Departments and Agencies of government, MDAs debt, insecurity, theft, lax corporate governance pose fresh challenges
According to some of the investors, the tripod structure of the sectors value chain which includes the generation, transmission and distribution are operating blindly in isolation and therefore causing shock in the system.
They said the weak structure of electricity companies, especially the 11 distribution firms (DisCos) and government-induced bottlenecks, have pushed the sector to limits, extremity and near termination.
Already, this has led to the takeover of the assets of Ibadan Electricity Distribution Company (IBEDC) by the Asset Management Corporation of Nigeria (AMCON) over default in the loan payment.
The company, confirming the takeover however, described it as obedience to a court order.
Integrated Energy Distribution and Marketing (IEDM) Limited, the core investor of IBEDC and other investors, own 60 per cent of the utility company, while the government controls 40 per cent share.
The Nigerian Electricity Regulatory Commission (NERC) had previously fined IBEDC N50 million for failure to secure a refund of an interest-free loan the IBEDC board granted to its core investor group.
The development was coming as the Abuja Electricity Distribution Company (AEDC), which has already been taken over by the debt crisis, took another turn with the sacking of most key management staff.
Currently, the debt owed to banks by the power sector stands at about N819.97 billion as of last year. The National Bureau of Statistics (NBS) had, in 2020, put non-performing loans (NPL) in the power sector at N33.22 billion out of N1.23 trillion NPLs recorded by banks.
This why some stakeholders fear that the sector faces imminent collapse as a results of a myriad of challenges.
Speaking with journalists yesterday, they highlighted the acute foreign exchange shortage in the country as a major challenge affecting the sector. This, according to them was because almost all the materials in the sector are being purchased in foreign currency, adding that the cost of maintaining their facilities is also in dollars.
“We hardly get enough dollars to be able to meet with the maintenance of our equipment and other obligations. This is one of the reasons the sector has been facing all manner of challenges and blackouts in recent time,” the source who pleaded to remain anonymous said.
The federal government had at the weekend explained that the drop in electricity generation was a result of the partial shutdown of the Oben gas plant for the repair of critical gas processing equipment.
It had also disclosed that the 14 reactivated independent power plants (IPP) across the country would produce off-grid electricity of 1,000 megawatts.
“We wish to notify the general public that the current dip in electricity generation is a result of the partial shutdown of the Oben gas plant to address the repair of critical gas processing equipment.”
“The incident, unfortunately, occurred at a time when other power plants on other gas sources are undergoing planned maintenance and capacity testing.
“We wish to notify the public that Seplat Energy Plc has mobilised equipment, material, and personnel to the site to expedite the restoration of normal gas supply to the affected power plants.
“We have been assured that the repair work would be concluded this weekend and normalcy will be restored. While pleading with electricity consumers with the current state of supply, we wish to assure the general public that efforts are being made for a sustained improvement of supply across the country,” the government had explained.
The Manufacturers Association of Nigeria (MAN) recently appealed to the federal governments to protect industries from collapse due to the erratic power supply in the country.
The chairman Kwara/Kogi branch of MAN, Bioku Rahmon, called for expedited rescue of players and investors from the imminent orgy of unemployment and mass closure of companies that is imminent due to the energy crisis.
He expressed concern that the manufacturing industry was yet to fully recover from the monumental strangulations occasioned by COVID-19 pandemic, while describing the subsisting energy crisis as the exact antithesis of what the industry can’t contain at this time.
He lamented that electricity generated from the national grid had recorded no improvement and was hampering the activities of manufacturers.
“Foreign Exchange scarcity has worsened significantly, even as industry players continue to experience a sharp and growing shrink in the forex windows. This has led to major downturns and stress in the purchase and acquisition of foreign components for production,” MAN said.