Egbin Power Plant has announced that it may have to shut down operations, over an accumulated debt of ₦ 110bn.
Egbin Power Plant is ‘one of the biggest single power generating stations in Africa‘, with a generating capacity of 1,320MW, consisting of 6 units of 220MW each. Though presently it doesn’t meet up to its capacity, it still generates about ‘30%’ of the country’s electricity. As a result of Government’s privatisation, in November 2013, Egbin Power plc was acquired by the partnership between New Electricity Distribution Company(NEDC) and the Korean Electric Power Corporation (KEPCO).
This debt of ₦110bn has been accumulated over the years. The power plant claims that it owes various bodies.
We owe the gas companies and have others like our technical partners (KEPCO) to pay, and importantly our lenders, the banks. We have made massive investments in making the plant available to generate electricity sustainably but unfortunately, we can’t break even due to the gross inefficiency in the value chain -Dallas Peavey, Managing Director and Chief Executive Officer, Egbin Power PlcAdvertisement
Egbin Power Plant has been in debt for some time now, as of September 2016, the power plant owed the debt of ₦99bn, and according to Dallas Peavey, Managing Director and Chief Executive Officer of Egbin Power Plc, the Federal Government owed the power plant ₦86bn.
The government has not held on to its own end of the deal with Egbin Power Plc as explained by the Dallas Peavey.
The government guarantees to pay us for every megawatt we generate and sell to Nigerian Bulk Electricity Trading, NBET, but they have not done that. We just got paid for the month of December, 2016, three months later and we were only paid a paltry 28% of the total 100% of the verified and accepted invoice for that month. That is how the outstanding debts kept accumulating for three and half years now -Dallas Peavey, Managing Director and Chief Executive Officer, Egbin Power Plc
For some time now, the electricity supply has taken a turn for the better, but if this coming crisis hits, the state of Nigeria’s electricity may become catastrophic.
Let me be honest, if Egbin fails, it’s going to be dark as Egbin provides close to 30 percent of Nigeria’s power, so let the required intervention be completed and urgently too -Dallas Peavey, Managing Director and Chief Executive Officer, Egbin Power Plc
Electricity is of major importance in Nigeria, it’s inadequate supply already causes the Nation a lot, several businesses suffer because of epileptic power supply. Electricity affects a lot of things, even the quality of telecommunication service.
Speaking with Channels television today, the Vice Chairman of Nigerian Communication Commission(NCC) Prof. Umar Danbatta laments on how unstable electricity is one of the challenges facing telecoms. If Egbin Power Plant shuts down, telecommunication operators will find it more challenging to provide quality service.
Unstable Electricity Supply Affecting Quality Of Telecom Service In Nigeria – NCC. https://t.co/f8HmmesFxK
— Channels Television (@channelstv) March 30, 2017
Therefore, it’s little wonder what will happen when the company that generates about 30% of Nigeria’s electricity shut down. Electricity in Nigeria needs to only get better not take a turn for the worse.
On the 1st of June 2019, Techpoint will gather like-minded people from all over Africa and the world to participate in conversations that would change the course of technology in Africa through AI, Robotics, Blockchain, Cloud Computing & the Future of Work at Techpoint Inspired. Register now to be part it. 15% Early Bird discount code: TPloyal007.
Nigerian startups raised $178m from 166 deals in 2018. Find out more when you purchase Techpoint’s Nigerian Startup Funding Report 2018 here.