The near collapse of the power sector occasioned by liquidity shortfall to settle debt liabilities may have been averted as the Nigerian Bulk Electricity Trading Plc (NBET) has set aside N139 billion for the payment of electricity generation companies(Gencos).
The government-owned NBET buys electricity in bulk from generation companies through Power Purchase Agreements and sells through vesting contracts to the Discos, which then supply to the consumers.
The N139 billion payment to Gencos represents about 98 per cent of the 2021 budget of NBET.
Recall that the Director, Egbin Power Plc, the biggest power generating plant in Sub-Sahara Afica, Mr. Kola Adesina, had, during the visit of the Senate Committee on Privatisation and Commercialisation, raised the alarm that the debt which the Nigeria electricity market was owing the plant had hit N388 billion.
He added that the debt NBET owed the plant might put a question mark on the country’s sanctity of contracts.
The N139 billion Gencos payment, which is contained in the 2021 budget of NBET, added that efforts are on to make the recent audited accounts of the bulk trader public.
“The total budget of NBET this year is N142 billion. Out of this, N139 billion is for paying generation companies. This is because the cumulative cost is yet to be recouped,” the financial document showed.
“Being the 98 per cent of the budget, this N139 billion is to manage the gap between what the DisCos are paying and what the GenCos are invoicing,” the document reads.
The document added that the recent audited account, as at last year, was that of 2013. In the last one year, the NBET has completed 2014 to 2016, worked on 2017 and 2019 while works on 2020 and 2021 audited account are to be handled by one of the biggest four audit firms.
As at 2020, the indebtedness of the Distribution Companies (Discos) to NBET increased to N510.53 billion in 2020 from N453.14 billion in 2019, indicating an increase of 11.2 per cent.
The debt profile accrued due to the inability of the 11 Discos in the country to remit a total of N510.71 billion to the NBET for the electricity sold to them from January to December 2020.
Data showed that the bulk electricity trader sent an invoice value of N730.71 billion in the one-year period to the Discos but was only paid N220.18 billion, which left a balance of unremitted N510.53billion.
NBET had in a statement released in early September revealed that market receipts remitted by Discos in June 2021 amounted to N26.81 billion.
NBET also disclosed that the top three remitters were Eko Disco, Abuja Disco, and Port Harcourt Disco with 93.4 per cent, 86.6 per cent and 76.4 per cent respectively.
The statement, entitled: ‘NBET names Eko DISCO as the highest remitter in the June 2021 market receipt for grid distributed electricity,’ said the remitted fund had been disbursed to the generating companies in proportion to their invoices.
NBET said: “The June 2021 market receipt from Discos is N26.811 billion, with the three top remitters as Eko Disco, Abuja Disco, and Port Harcourt Disco with 93.4 per cent, 86.6 per cent and 76.4 per cent respectively.”
Head of Corporate Communications, Henrietta Ighomrore, stated that NBET was committed to ensuring timely and efficient payment to GENCOS to enable the generation firms fulfill their obligations and maintain sustainable supply of electricity to the grid.