From Isaac Anumihe, Abuja
Chief Executive Officer (CEO) of Association of Power Generation Companies (APGC), Dr. Joy Ogaji, has stated that the federal government has no policy on electricity subsidy.
This is coming against the backdrop of reports that Enugu Electricity Regulatory Company (EERC) has captured N45 for generation cost out of N112 which implies that it is accounting for just 40 per cent and 60 per cent is left to be covered by the federal government subsidy. That’s, for this year, it’s just N900 billion.
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Ogaji recalled that generation companies (GenCos) are currently owed about ₦4 trillion (₦2 trillion for 2024 and ₦1.9 trillion in legacy debts) (2015-2024) with an accumulated debt of N1.2 trillion for first half of 2025 alone.
“There are no workable solutions, including cash payments, financial instruments, and debt swaps in sight at the moment.
The 2025 government budget allocated only ₦900 billion, raising concerns about its adequacy to cover arrears and future deficits.The power generated by GenCos have continued to be consumed in full without a corresponding full payment” she argued.
At the inception of the privatisation, she said, as part of the take-over process and in line with the government’s objectives, the GenCos entered into several agreements, including the performance agreement, which defined the contractual relationship between the federal government and GenCos, guaranteeing amongst others that GenCos had sufficient and guaranteed gas supply; had requisite regulatory approvals to generate power; had grid connection and access to evacuate the quantum of energy generated; had securitised assurance that they would be paid as and when due by the off-taker, and that they would receive capacity charge payments for generation capacity made available if they were prevented from generating energy for reasons beyond their control.
“Protection from the foreign exchange (forex) volatility notwithstanding, the aggravated effects of inefficient grid operations have increased their (GenCos) machine maintenance costs with over 90 per cent of their operational cost in dollars.
“The reality is, GenCos are engaged in a massive capacity recovery but have been constantly paid less
than 100 per cent of their invoice monthly.
“About 12 years after the privatisation, available data shows that GenCos’ available generation capacity requirements have been exceeded.
“The implication of this is that GenCos have kept to their industry
agreement with the Bureau of Public Enterprises (BPE) and the NESI as a market.
“Despite the growth of power, both available capacity and declared capacity, power still remains a national problem, as over 50 per cent of this capacity is not being enjoyed by consumers due to constraints at the transmission and distribution subsector, hampering GenCos operations” GenCos said ENDS
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