The Chairman, Egbin Power Station, Mr Kola Adesina, yesterday said
the N39 billion being owed the firm by the Federal Government is
crippling its expansion plan.
Adesina, who spoke with reporters in Lagos, said the debt has been hanging since November 2013.
He said the debt was equally creating some bottleneck in the company’s planned capacity expansion initiative.
The non-activation of Power Purchase Agreement (PPA) by government,
he said, was also posing operational challenges in the system.
The chairman said the management of the firm had fulfilled all
performance agreement it entered into with government upon its
acquisition in November 2013.
He said the management was planning to raise the plant’s capacity by additional 1,350megawatts (Mw) to hit 2,670Mw by 2019.
According to him, about $1.3 million will be spent on the proposed expansion programme of the plant.
Adesina said the 1.100Mw Egbin plant prior to its privatisation was in deplorable condition, generating about 500Mw.
“The plant before then did not undergo any major overhaul, the six
units were not functional and in particular unit six was not working for
10 years.
“But to date, we have rehabilitated all units and currently generating 1,100Mw,’’ he said.
He also said management had significantly secured the facility to avert infringement by unauthorized persons.
“We now have in place new distribution control system of global
standard, fire alarm detection system that was not in place earlier and
have installed gas meter system to capture quantum of gas received.
“We have also improved on our operational performance, but government
is still owing us for electricity generated,’’ he lamented.
According to him, no matter how keen one desire to transform one’s
nation may be, the necessary impetus is lost when one doesn’t get paid
for services rendered.
Adesina, pointed out that “upon acquisition, the exchange rate was N158 to a dollar and now it is N199.5.
“The huge differential is affecting us negatively considering that
the company sourced for tools abroad to keep the plant running and our
business plan upon acquisition is predicated on N158,’’ he said.
Adesina also criticised some institutional issues that have not been resolved, including regulatory and policy matters.
He noted that the business environment was unpredictable and had
affected the company’s ability to access fund from the N213 billion
Central Bank of Nigeria (CBN) intervention initiative.
“Under the PPA, government is to pay for electricity generated, but
since it is not in place, and in some cases where we generate 1,100Mw,
we are asked to step down to 700 Mw due to transmission issues, who pays
for the balance?’’ He asked rhetorically.
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