Cancellation Of Power Sector Privatisation Will Hurt Nigeria More - Gencos

The electricity Generation Companies (Gencos) said Nigeria might be at the losing side if the Senate keeps to its statement of reversing the privatisation of the power sector.

The Gencos made this known following the Senate's threat of cancelling the privatisation due to the Gencos and Discos failure to provide stable power supply.

The Gencos said the reversal of the 2013 privatisation agreement isn't the solution to the inability of the power providers to supply stable electricity. According to the umbrella body of the Gencos, Association of Power Generation Companies, the reversal will have a significant negative impact on inflow of foreign direct investments to the country.

Lawan's Threat That Led To Gencos Response

AllNews had previously reported that the Senate announced plans to cancel the privatisation of the power sector done during the Goodluck Jonathan administration. The Senate President, Ahmad Lawan, said there's a need to either reverse or cancel the privatisation arrangement and investigate the trillions spent so far.

He said the power firms are private companies, yet they keep coming to the government for financial support to enable them improve power supply. He said the Discos don't have the capacity to supply power and Gencos have their challenges as well, “We gave power to them (power generation and distribution companies) and they still come to the public to ask for funds. I think it’s time for Nigeria to consider reversing the privatisation of the power sector or they should just cancel the entire privatisation process completely," Lawan said in the report.

However, the current period is unfavourable for such a decision as Nigeria is currently struggling with foreign reserves due to the COVID-19 pandemic affecting major sources of foreign direct investments in Nigeria.

Gencos Owed N1 trillion

Reacting to the Senate's threat, the umbrella body of the Gencos acknowledged the poor state of the power supply, but stated that, “It is very pertinent to state that the reversal of the privatisation exercise of 2013 is not the solution to resolving the current abysmal state of the sector,”.

While the Senate President said the electricity companies keep approaching the government for funds to operate their business, APGC also stated that the generation companies are owed N1 trillion. According to their explanation in a Punch report, as stipulated in the governing contract, key guidelines set by the Bureau of Public Enterprises and operators have not been activated since the privatisation.

The body said, “This has led to a huge outstanding debt of approximately N1tn owed to Gencos from the inception of privatisation till date,” Adding that only 11 to 30 per cent of their invoiced amount are paid monthly.