Don't Miss


Home   >   Business   >   Industries   >   FG will pay legally contracted, verifiable debts – Fashola

FG will pay legally contracted, verifiable debts – Fashola

By on December 13, 2015

The Minister of Power, Works and Housing, Mr. Babatunde Fashola says the Federal Government is committed to the payment of all legally contracted and verifiable debts in the power sector.
This is coming as the Chairman of Egbin Power Plc, Nigeria’s biggest power generating company, Mr. Kola Adeshina has said that the N47 billion debts owed the company had become a critical challenge hampering the efforts of the new owners of the facility to expand the capacity of the 1,320 megawatt-capacity plant.

Speaking yesterday during the inauguration of additional 220 megawatts of electricity to be dedicated to Lagos State by Egbin Power Plant, Fashola commended the Sahara Group and the KEPCO of Korea, who are the new owners of Egbin Power Plant for putting their investments and talents to tackle a local challenge.
Fashola also lauded the Bureau of Public Enterprises (BPE) and other stakeholders for taking the power sector far through the process of privatisation.

On the debts owed the company, the minister stated that the government would pay debts that are legally contracted and verifiable.
He promised to ensure that ministries, departments and agencies (MDAs) pay their electricity bills promptly.
In his speech, Adeshina also identified rising exchange rate as another critical challenge facing Egbin and appealed to the federal government to create a special foreign exchange allocation for the power sector as was done for the operators in the oil and gas sector.
He noted that since the plant is run with offshore resources, the rise in exchange rate from N155.67 per dollar when the plant was acquired in November 2013 to the current official rate of N199 per dollar is hampering its operation.

“Considering the fact our revenue is in Naira, this huge differential is impacting on the procurement of essential materials and payment of O&M services to our technical partners,” he said.
According to him, the owners of the plant cannot access foreign exchange even at the high rate of N199 per dollar.
Adeshina urged the minister to help the company recover the huge debts and also create special allocation to ease the access of operators to foreign exchange.

He revealed that when the new investors took over the asset, generation was barely 400 megawatts, adding that the new management has since increased the generation to 1,100 megawatts.
He further stated that as soon as Unit 1 is repaired in early next year, the plant will generate its full capacity of 1,320 megawatts.
Adeshina also informed the minister that feasibility studies had been concluded to increase the capacity of the plant by additional 1,350 megawatts in the next four years.

“We are delighted to have you inaugurate the dedication of the additional 220mw that is set to yield about 16 per cent more power supply to the Lagos State industrial community. We are equally pleased to inform you that a bilateral agreement to supply the 220mw to Ikeja Electric and Eko Distribution Company is already in place,” he said.

“The story of Egbin is still unfolding as we have already commenced feasibility studies to double the capacity of the plant to 2670mw. As we prepare to power the change that will drive Nigeria to its next phase of sustained growth, we also target an Egbin that would birth an industrial park,” Adeshina added.

 

[ThisDay]