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Government owes Egbin power plant N125bn

By on September 4, 2017

Egbin power plant, the biggest in Nigeria, is owed N125bn ($352m) by the Federal Government and half of its output is wasted because of inadequate transmission infrastructure, its Chief Executive Officer, Dallas Peavey Jr., has said.

Out of the roughly 1,300 megawatts currently generated by the facility’s six units, which is close to full capacity, about 700MW is lost since the grid is overwhelmed, according to the Egbin CEO.

He spoke in an interview, Bloomberg reported on Friday.

Egbin is working with the Transmission Company of Nigeria to improve things, according to Peavey.

Peavey said Nigeria was currently distributing an average of 4,500MW of electricity.

That’s an improvement from 1,000MW in May 2016, when gas supply was disrupted, and from an average of 2,503MW recorded in the second quarter of this year, according to the National Bureau of Statistics.

But it is still far from the needs of Nigeria’s 180 million inhabitants who face daily blackout. South Africa distributes about 34,000MW during peak demand, for a population less than a third of Nigeria’s.

Egbin is facing financial difficulties, with the government owing it N125bn, according to Peavey. “We need to be paid, that is a very big challenge,” he said.

Sahara Group Plc, the Nigerian energy company that owns Egbin, has invested $400m in the plant since it took over in 2013, after a partial sale of state-power companies to private investors.

With such debt, banks are reluctant to give Egbin loan facilities. “But we will continue to work with the banks, the Central Bank of Nigeria and the federal government so that we close that gap and lower that risk,” Peavey said.

While Egbin is owed money, the amount given by Peavey was incorrect, Yesufu Alonge, the head of power procurement at government-owned Nigerian Bulk Electricity Trading Plc, said, declining to provide a figure. The delay was in part due to the fact that distribution companies owed the trading company payments, he said.

 

[Punch]