Minister of Power, Adebayo Adelabu, shared that the Federal Government is set to initiate payments towards the debts it owes power generating companies and gas suppliers starting from April.
During a recent visit to Egbin Power Plc in Ikorodu, Lagos State, Adelabu made this announcement.
He mentioned plans to collaborate with the Central Bank of Nigeria to prioritize foreign exchange allocation to the power sector in order to enhance generating capacity.
Addressing the outstanding debts to stakeholders in the power sector, Adelabu assured Egbin of the government’s commitment to addressing the situation to prevent operational disruptions.
“The Federal Government is settling debts owed to power generating companies, with Egbin Power plant being a significant creditor. We aim to avoid operational setbacks and have assured payments will commence in April to motivate their continued operations,” he explained.
Furthermore, Adelabu highlighted the gas shortage as a major challenge affecting gas-fired power plants.
For gas suppliers, efforts are underway to start repaying debts by offering cash injections, promissory notes, and potential access to Nigeria’s gas resources to gradually offset outstanding balances.
He anticipated that the debt issue would be resolved soon, with tangible results expected as early as April.
In discussions with the Minister of Finance and Minister of Budget and Economic Planning, plans are in place to secure funding for debt repayments.
Egbin Power’s CEO, Mokhtar Bounour, expressed concerns over revenue losses due to gas shortages, hindering optimal power generation.
The plant’s current output is limited to 400MW instead of its 1,000MW capacity due to insufficient gas supply.
Bounour highlighted ongoing challenges faced by the plant, with assurances of gradual solutions for future improvements.
Notably, he emphasized the critical need for adequate gas supply to sustain operations effectively.
Regarding outstanding debts, the GenCo is owed approximately N1.4tn, which poses liquidity challenges that are expected to be addressed following the promised relief starting in April.
In February, it was reported that the Federal Government owed gas companies up to $1.3bn, underscoring the urgency of resolving these outstanding financial obligations.