* Alleges power consumers unwilling to pay bills

Web Editor | 绿帽献妻

Nigerian power producers are owed at least $2.7billion by a state-owned company that buys their output and resells it.

The debt, Bloomberg report says, is threatening their viability and undermining their ability to invest in the energy-starved nation, according to an industry association.

Only 60% of residents of Africa鈥檚 most populous country (Nigeria) have access to electricity and even those who do are plagued by regular outages.

While President Muhammadu Buhari has made tackling the power deficit a priority, the failure by the state-owned Nigerian Bulk Electricity Trading Company (NBET) Plc to pay its debts on time is a major hindrance to meeting that goal.

Estimates that the trading company has amassed N1trillion ($2.7billion) of debt to power producers since 2013 are 鈥渆xtremely conservative,鈥� Joy Ogaji, Executive Secretary of the Association of Power Generation Companies, said in an interview in the capital, Abuja.

鈥淭o be frank, I鈥檓 afraid for the survival of the industry in the next six months,鈥� said Ogaji.

NBET confirmed in a statement on its Web site that it鈥檚 only able to pay producers a portion of what they invoice – typically 10% to 30% – due to debt-collection problems of its own.

It sells power to closely held distribution companies, which are in arrears, in part because they can only secure payment for about two-thirds of the electricity they supply to electricity consumers.

鈥淢y contract is with NBET to put power on the grid and be paid 100% for it. Whether your off-takers are paying you or not, that shouldn鈥檛 be my problem,鈥� the Executive Secretary stated.

The distribution companies (DisCos) complain that the regulator didn鈥檛 institute realistic tariffs when the electricity industry was partially privatised in 2013, and that price increases haven鈥檛 kept pace with inflation or responded to deterioration in the exchange rate.

鈥淚f you鈥檙e underselling the product how can you remit 100%?鈥� Sunday Oduntan, Executive Director of the Association of Nigerian Electricity Distributors (ANED), said the source.

The Nigerian Electricity Regulatory Commission (NERC) on January 5, 2020, announced that it would raise consumer prices in April as part of a plan to help the distributors narrow their revenue shortfall. The increase will be the first since 2015.

Reluctant payers

The tariff increase will help 鈥渢ake us out of the woods,鈥� but even at current prices, people aren鈥檛 willing to pay their bills, Oduntan said.

Ministries and government departments are among those who are in arrears, he said.

While the government has committed to covering the difference between cost-reflective tariffs and the prices consumers pay, it owes the distribution companies more than N500billion, PricewaterhouseCoopers said in a presentation in September 2019.

The state has made several big interventions across the electricity industry since 2014 鈥渢o avoid total collapse,鈥� the firm said.

Nigeria has 13,000 megawatts of installed electricity-production capacity, about 80% of which comes from gas-fired plants.

Nevertheless, only 7, 500 megawatts of that is available and an average of about 4,000 megawatts is dispatched to the grid each day.

Distribution companies are unable to use all the power producers can offer due to the poor state of the state-owned transmission infrastructure, meaning a large amount of it becomes wasted, according to Oduntan.

The Nigerian Government signed a deal with Siemens AG in July 2019 to rehabilitate, and then, expand the national electricity grid.

However, Ogaji has questioned the rationality of a January 1 announcement by President Buhari, that the government intends building the multibillion dollar 3,000-Megawatt (MW) Mambilla hydropower facility in eastern Nigeria 鈹� a project first conceived in the early 1980s 鈹� to ease energy constraints.

Why is the country 鈥渁cquiring more capacity when what is available is stranded?鈥� Ogaji inquired.

鈥淔irst and foremost, let鈥檚 optimally utilise what is available,鈥� he said.