The Minister of Power, Bayo Adelabu, says he is in talks with relevant stakeholders to clear the debt owed to power generating companies (GenCos) by the Federal Government (FG).
He noted the unpaid debts and low gas supply as some of the reasons for the inability of power plants to operate to capacity in the country.
The Power Minister furthered that Nigeria should migrate to a full cost-reflective tariff regime if FG cannot pay for subsidies owed to the market.
Adelabu stated this on Wednesday when he visited the Olorunshogo Power Plant in Papalanto, Ogun State and the Omotosho Power Plant in Ondo State.
The two government power plants being managed by the Niger Delta Power Holding Company was inspected by the Minister, who said the tour was part of his nationwide visit to power installations of the Federal Government.
The tour intends to “inspect and monitor the physical state and the operational state of these power plants.”
Impressed with the size and the technology of the Olorunshogo and Omotosho power plants, the Minister said “I am amazed at the level of under-utilisation of these power installations.”
However, according to him, each of the power plants operates below 25 per cent capacity, at a time the nation is still complaining about low power generation.
“The under-capacity utilisation is due to a variety of reasons. The major part of it is the shortage in gas supply to these installations. Which is why I needed to see these plants myself. To look at what can we do to improve the operational capacity of these plants.
“What can we do to repair those turbines that are down. What can we do to support these power plants to operate at impressive capacity. So that power supply will improve nationwide,” he said.
Adelabu said if the plants were sold in their current state, the country would be losing, maintaining that Nigeria had invested so much in those power installations that have only existed for 12 years.
To address the gas supply challenge, the minister said there was need for a roundtable meeting and collaboration with the Minister of State for Petroleum (Gas) in order to ensure that gas supply to the generating companies were regular, which will ultimately solve the issue of under capacity utilisation of the plants.
“And we also want to appeal to the Federal Government that once there is a subsidy promise, it has to be fully funded. If our government is not ready to fund subsidies, it is actually better for us to migrate to a fully cost-reflective tariff; because liquidity is a major issue in the sector, which has led to a huge debt being owed power generating companies. And once they are owed, they are also unable to pay the gas suppliers.
“When the gas suppliers are not paid, they will be unwilling to supply regular gas to them. So why are these debts piling up? Part of the debts are owed by the DisCos. The Federal Government is also owning a huge portion of these debts, which relates to the unfunded portion of the subsidy that they pledge.
“So, I will do everything within my capacity. I have already had a meeting with the honourable Minister of Finance and Coordinating Minister of the Economy as well as the honourable Minister of Budget and National Planning, and the Special Adviser to the President on Energy, on how we can fund the outstanding subsidy unpaid by federal government,” Adelabu stated.
He promised that efforts were on top gear to make power available to Nigerians, especially through reliable energy sources.
