The epileptic power supply in the country may be set to continue after the nation’s largest electricity companies on Wednesday indicated that they will shut down power supplies unless indebted government agencies and parastatals pay up longstanding bills.
The Six power generating companies, also known as Gencos, which were products of the recent privatization initiatives by the Federal Government, said they would shut down electricity generation imminently if a debt of 156 billion naira ($485 million) owed from a government agency was not paid.
They also said commercial banks were recalling loans made to them. The Federal Government has paid arrears of 186.7 billion naira but as of July, the generating firms said they have received only 28.6 percent of their April invoices.
The central bank has stepped in with a 213 billion naira loan to keep the system afloat and allow the power firms to access credit, but more is needed as the oil price slump pressures the Naira.
The companies, which include Transcorp’s power subsidiary and Forte Oil’s power unit complained that they had no access to gas and added that they struggled to repair their networks because imports of spare parts had become too expensive due to the naira devaluation.
The naira has lost 40 percent of its value since Nigeria ditched its 16-month-old peg of 197 naira to the dollar in June.
The government has increased tariffs by 45 percent in February, but the generating companies say the tariff reviews have not kept pace with rising cost, worsened now by a recent court order reversing the increase in tariffs.
Potential foreign investors and small scale businesses point at the nations chronic power shortages as one of the biggest constraints on investment and growth in Africa’s largest economy.
There have been calls on the President Muhammadu Buhari led government to step up its intervention in the power sector to improve power supply. Producing less than 4,000 megawatts, Nigeria requires ten times the amount it currently produces to guarantee power to 170 million people.