The Niger Delta Power Holding Company (NDPHC), a federal government-owned power firm, has revealed that the Central Bank of Nigeria (CBN), the Nigerian Bulk Electricity Trading Plc (NBET), and the Nigerian Electricity Liability Management Company collectively owe a substantial sum of N190 billion for electricity supply. This disclosure was made by the Managing Director and Chief Executive Officer of NDPHC, Chiedu Ugbo, during a media briefing in Lagos.
Long-Standing Debt Accumulation
According to Ugbo, the N190 billion debt has accumulated from 2015 until May 2023, with NBET being the primary debtor, although the specific amount was not disclosed. The indebtedness encompasses unpaid invoices and has posed significant challenges for NDPHC in meeting its operational obligations, including expenses related to spare parts, payments to gas suppliers, and more.
“Huge indebtedness by the market to NDPHC runs into hundreds of billions, N190 billion as of May for unpaid invoices. NDPHC is also not paid for availability but only as dispatched thereby depriving NDPHC of hundreds of billions since 2015 when the Transitional Electricity Market was declared, and the government has so far been denied revenue as high as N3 trillion,” explained Ugbo.
Impact on Power Generation
The outstanding debt has adversely affected NDPHC’s ability to pay gas suppliers, crucial for power generation. Despite having a nameplate capacity of 4,000MW and the capability to generate up to 2,000MW, the company currently generates only 975MW due to these financial constraints.
Call for Private Capital Mobilization
Ugbo highlighted the need for urgent private capital mobilization to address the liquidity challenges in the power sector. He emphasized that government initiatives and interventions alone are insufficient, advocating for exploring independent transmission projects, particularly with Generating Companies (Gencos) as investors.
“Despite the interventions and other FGN initiatives in networks, liquidity challenges persist. It is obvious that a lot more investment is required in transmission, and government alone cannot do this. There is, therefore, a need for urgent private capital mobilization, and exploring independent transmission projects starting with Gencos as investors,” stated Ugbo.
NDPHC’s ‘Light Up Nigeria Initiative’
Executive Director of Generation, Engr. Abdullahi Kassim, expressed optimism in resolving the challenges through NDPHC’s bilateral contracts, specifically the ‘Light Up Nigeria Initiative.’ The program aims to leverage the company’s generation assets to deliver reliable power to eligible customers, distribution companies, and third-party project developers, with the ultimate goal of providing over 97% generated power to the masses.