The Minister of Power, Adebayo Adelabu, has announced that the Federal Government will commence the partial repayment of debts owed to power generating companies and gas suppliers starting from April.
During a visit to Egbin Power Plc in Lagos State, Minister Adelabu pledged to prioritize foreign exchange allocation to the power sector, aiming to enhance capacity in electricity generation. He emphasized the government’s commitment to addressing the outstanding debts owed to stakeholders in the power sector, particularly power generating companies.
Adelabu highlighted the significance of ensuring that the debts do not hinder the operations of power assets like Egbin Power Plant, stressing that the government aims to incentivize continued operation by initiating debt repayment measures.
Additionally, efforts are underway to address the gas shortage affecting gas-fired power plants, with discussions held with the Minister of State for Petroleum Resources and gas suppliers. The government plans to inject cash payments and issue promissory notes to settle the debts gradually, alongside providing access to Nigeria’s gas wells for suppliers.
In response to the challenges faced by Egbin Power due to gas shortages, CEO Mokhtar Bounour underscored the adverse impact on revenue and power generation. Bounour expressed hope for imminent improvements following the government’s commitment to addressing gas supply issues and debt repayment.
Egbin Power, operating below full capacity due to insufficient gas supply, is among the power generating companies grappling with liquidity issues exacerbated by outstanding debts from the Federal Government, amounting to N1.4 trillion.