About one week after the Federal Government hinted about its plan to offset the N4 trillion debt owed power generation companies (GenCos) in the country, indications have emerged that the arrangements to settle the debt are yet to be tangibly consummated.
A news report from The Punch on Tuesday quoted the Chief Executive Officer of the Association of Power Generation Companies, Dr Joy Ogaji, as saying that the operators have held meetings with government officials to discuss modalities for settling the outstanding debts but that no agreement has been reached.
Ogaji, clarified: “Yes, the chairmen were invited to discuss modalities. I know that discussions are still ongoing. Nothing finalised or concretised. I can’t confirm it.”
It would be recalled that last week, the Special Adviser to President Bola Tinubu on Energy, Olu Verheijen, stated that the Federal Government had initiated moves towards restoring financial stability and investor confidence in the electricity market with the finalisation of the implementation framework for the Presidential Power Sector Debt Reduction Plan
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According to her, the plan is designed tp address structural bottlenecks and create enabling environment for large-scale private sector-led investment and sustained economic growth.
Verheijen stated on October 7 that the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, Minister of Power, Adelabu, and herself met with senior executives of Nigeria’s electricity generation companies to review settlement modalities for the outstanding debt.
She claimed that at the meeting the attendees consensually agreed on some steps forward, including conducting bilateral negotiations to finalise full and final settlement agreements that balance fiscal realities with the financial constraints of the GenCos.
Verheijen said that the President approved the plan authorised the issuance of up to N4tn in government-backed bonds to settle verified arrears owed to generation companies and gas suppliers and that the approval was endorsed by the Federal Executive Council (FEC) in August this year.
However, the GenCos claimed that they were not carried along by the Federal Government or the Nigerian Bulk Electricity Trading Company on the verification exercise that would have enabled them to make inputs.
Based on the association’s position on the issue, Ogaji had last month written a letter to NBET seeking clarity on the exercise and wondering why GenCos were not carried along during the verification process.
