..As forex differentials threaten power firms’ agenda
Some of the investment plans scripted by the private power firms during the privatisation programme may not be realised after all, going by the recent lamentations on the pangs of the rising exchange rate differentials on their respective operations.
Besides, the power firms were also groaning under outrageous debt profile of the customers, especially the Ministries, Departments and Agencies (MDAs); gas supply challenges; poor access to loan facilities; non-cost reflective tariff and policy frameworks of the Federal Government, among others.
The Managing Director, Egbin Power Plc, Kola Adesina, who was worried with this situation explained that the foreign exchange differencial challenges has been impacting on the operations of the electricity generations companies, as they needed to shop for materials from abroad.
He therefore urged Federal Government to help solve the problem of the huge foreign exchange exposure. “At the time of privatisation, the exchange rate was N155.76 to $1; but today, the official rate is N199 which is not readily available,” he said.
He further appealed to the government for the payment of over N47 billion debts due from MDAs to his company over the years.
Adesina said the additional 220Mega Watts from Egbin would yield about 16 per cent supply improvement to Lagos State and its environs, adding that it would further drive economic growth and development through the revival of entrepreneurial aspirations, job creation, real sector growth and enhanced productivity in the state.
“Over one million homes in Lagos would enjoy additional six hours per day of stable power supply. Over 6,000 direct jobs, over 10,000 indirect employments, to be created from support and maintenance services, engineering, procurement, supplies to different sectors. Robust growth for hundreds and possibly, thousands of SME’s across Lagos,’’ he said.
Adesina added that Egbin has already commenced feasibility studies to double the capacity of the plant to 2670mw in the nearest future, while plans are at advanced stage for its industrial park.
The Egbin Power Plant, the nation’s biggest generating utility, is now operating at its installed capacity of 1,320MW following the rehabilitation of a turbine that had been idle for several years.
The Minister of Power, Works and Housing, Babatunda Fashola, who was in Egbin recently to lunch the rehabilitated turbine, stressed the need for government ministries, departments and the military to pay for electricity supplied to them by power firms, so as to ensure that the power sector remains “sufficiently funded”. The minister however assured that the issue of debts in the sector would soon be resolved.
On the allocation for foreign exchange, he explained that the Central Bank of Nigeria is on top of the situation.
“I am sure that they will come up with something that addresses your concern as we go on. We must not be deterred, and we must talk to one another. I have proposed that very soon we will be holding some monthly meetings with all the Discos, all the owners, and we will run stress test to know who is having problems,” he said.