More than three years after the Federal Government of Nigeria handed-over the successor companies[1] to private investors, the power sector remains in dire straits. As at the end of December 2016, the revenue shortfall in the Nigerian electricity market had reportedly reached a staggering N1 trillion[2], whilst the sector’s huge indebtedness to commercial banks, as at the last quarter of 2016, stands at over US$12.52 billion[3]. Most of these debts to the commercial banks now appear in the banks’ balance sheets as non-performing loans (“NPLs”).
Given that the electric power sector is an unbroken interconnected chain of activities from generation to transmission to distribution to end users at homes, offices and factories, its alarming liquidity challenge certainly qualifies as a nation-wide crisis.
To date, the
- GenCos claim they are owed about N155 billion for electricity supplied;
- Gas companies assert that they have unpaid receipts of about N110 billion[4];
- DisCos are accusing Government’s ministries, departments and agencies (MDAs), including the military, of owing over N156 billion[5] and this excluded the several billions of Naira owed by private residential and commercial customers;
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[1] The eighteen successor companies are: six Generation Companies (“GenCos”); eleven Distribution Companies (“DisCos”); and the Transmission Company of Nigeria (“TCN”). Whilst the GenCos and Discos have been privatized with government now holding only a small percentage of equity in them, the TCN still remains a government’s wholly-owned public utility
[2] See “Three years after, private sector investors count losses” by Isiwu & Kalejaye; Sweet Crude Reports – A Review of the Nigerian Energy Industry, 9 November 2016 – http://sweetcrudereports.com/2016/11/09/three-years-after-power-sector-investors-count-losses/
[3] See “$14.52bn Loans: Banks go after power sector Investors” by Ezekiel Enejeta; Financial Watch, October 3, 2016 – http://www.financialwatchngr.com/2016/10/03/14-52bn-loans-banks-go-power-sector-investors/
[4] See “Darker days ahead as debts mount for Nigeria’s electricity firms” by Isaac Anyaogu, BUSINESSDAY, November 14, 2016
[5] Ibid.
