Over the N4 trillion debt in the power sector, President Bola Tinubu will meet with the CEOs of the power-generating companies.
Following Tuesday’s high-stakes discussions between Adelabu and the chairmen of the Generating GenCos in Abuja, Bolaji Tunji, the Special Adviser, Strategic Communications and Media Relations, issued a statement to the Minister of Power, Bolaji Tunji, on Sunday.
He claimed that the government’s intervention is intended to stop the country’s power infrastructure from crashing out right away.
The minister assured GenCos executives in the statement that the government would prioritize making significant payments out of the N4tn debt while reimbursing the money with other debt instruments.
He claimed that a meeting between President Tinubu and the leadership of GenCos would make this suggestion.
“A sizable portion of the debt needs to be paid in cash,” the statement states. Let’s say we make a sizable deposit, then request a promissory note as a debt instrument to cover the remainder.
He used financial instruments, such as promissory notes, to guarantee the payment of the outstanding balance in six months.
“We acknowledge the urgency of this issue. Adelabu stated that the government would meet with GenCos leadership to discuss the matter and that the government would work with them to stabilize the sector and stop further crises.
Col. Sani Bello, the chairman of Mainstream Energy Solutions and the chairman of the Association of Power Generating Companies (APGA), who had earlier raised the alarm about the sector’s dire state, citing the N4tn debt as a pressing threat to operations, as the head of the GenCoS.
He also reaffirmed that GenCos were unable to secure loans or maintain infrastructure due to liquidity issues. He argued that the entire power ecosystem could collapse without immediate intervention.
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This is a national emergency, according to Kola Adesina, the chairman of Egbin Power and First Independent Power Limited. Power is everything, including hospitals, homes, and industries. We can’t afford to see the sector fail.
Adelabu pledged to carry out reforms to reduce operational bottlenecks as well as to pay off the government’s role in the sector’s struggles. He urged Nigerians to adopt cost-reflective tariffs in order to fully liberalize the power sector.
Citizens are required to pay the appropriate price for energy consumed. Nigerians who are economically disadvantaged will continue to receive targeted subsidies from the Federal Government. He argued that we must grasp that subsidies cannot be resisted indefinitely and that public awareness campaigns must be conducted to encourage compliance.
APGC Power CEO Dr. Joy Ogaji went into great detail about the systemic issues that plague GenCos, including persistent late payments, unpredictable gas prices, and volatile foreign exchange rates.
She noted that maintenance budgets and loan repayments were hampered by the naira’s drop from 157/$ in 2013 to 1,600/$ in 2014 (nbsp).
While remaining patriotic, she claimed that “genCos have borne unsustainable risks from grid failures to unproductive taxes.”
The minister gave recommendations for ensuring that the sector’s transition to sustainability, including regulatory reviews to lower levies and promote market stability.
Source: Channels TV
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