N39bn Debt Threatens Operation of Egbin Power Plant - Chairman of Egbin Power Plc Raises Alarm

The Chairman of Egbin Power Plc, Mr. Kola Adesina, Monday raised the alarm that a debt of N39 billion owed the Egbin Power Station for the power it generated into the national grid since November 1, 2013 to date has created liquidity crisis that is hampering optimal operation of the plant.

He said this situation has hampered the efforts of the owners of the plant to boost electricity generation in the country. Egbin Power Plc is the largest power generating station in Nigeria with an installed capacity of 1,320MW consisting of six units of 220MW each.

Adesina, who blamed the liquidity crisis on what he called inconsistent regulation, however told journalists in Lagos that the investors would add more 1,350 megawatts to the 1,320 megawatt-capacity plant to hit a generation target of 2,670 megawatts by 2019.

He stated that as part of the efforts to achieve the additional 1,350 megawatt-capacity, the owners of the plant have commenced the feasibility/viability studies; Environmental Impact Assessment (EIA), Front End Engineering Design (FEED) and have also set in motion the process of signing the Engineering Procurement and Construction (EPC) contract for the new capacity.

“All these things have begun and 2019 is the projected period of completion. It is expected that by 2019, we will fire the second unit of Egbin Power Plant,” Adesina revealed.

“All we are doing is predicated on receipt of money for services rendered. We are not receiving payment for services rendered,” he lamented.

Adesina further stated that the owners of the plant have executed the performance agreement signed with the Federal Government up to the tune of 100 per cent, adding that the performance agreement was predicated on the activation of the Power Purchase Agreements (PPAs) and Gas Supply Agreements (GSAs).

He however, added that despite the declaration of the Transitional Electricity Market (TEM), which effectively brings all actionable agreements into effect, the PPAs and GSAs have not been activated.

According to him, the non-activation of the PPAs and GSAs has led to a situation where Egbin is owed huge debt for power generated and is also not allowed to operate optimally.

Adesina alleged that there is regulatory inconsistency, which has also led to the inability of the operators to fully access the N213 billion power intervention fund set aside by the Central Bank of Nigeria (CBN).

According to him, the operators have been able to draw only 25 per cent of the intervention fund.

 

Source - Thisday