Minister of Power eyes CBN FX allocation to boost sector capacity | Headline News
GenCos' debt repayments will begin in April
Amid several challenges facing the power sector, including limited access to critical resources, the Minister of Power, Adebayo Adelabu, has partnered with the Central Bank of Nigeria (CBN) to provide foreign exchange (FX) to the power sector. ) revealed a plan to expand the allocation on a priority basis. Increase power generation capacity.
He disclosed the plan yesterday during an official visit to the Egbin power plant, noting that foreign exchange procurement was a major constraint for effective maintenance of the power plant facilities.
After assessing the critical requirements for spare parts and maintenance tools, Mr. Adebayo will prioritize foreign exchange allocation to the sector to strengthen the industry’s power generation capacity by ensuring that sufficient resources are available. He emphasized that he would cooperate with the CBN.
“This is a phenomenon that is endemic to all power plants, not just the Egbin power plant. Foreign exchange is required to maintain the turbines and replace tools and spare parts. This is a big problem and I believe that the CBN “We will take steps to liaise with the foreign exchange authorities to see how they will deal with it. We can prioritize the foreign exchange allocation,” he said.
The Minister referred to the outstanding debt owed to the Electricity Generation Company (GenCo), stressing that the Federal Government is heavily indebted, with Egbin Power Plant topping the list of creditors.
He noted that despite the financial challenges, the Egbin Power Plant has shown generosity by continuing to operate and avoiding potential closure, adding that these debts have weighed on the power company's operations. He emphasized the importance of not interfering with the situation.
Mr. Adelabu disclosed that the Federal Government has made repayment of outstanding debts a top priority and will start paying the Egbin Power Plant operator in the form of incentives and incentives from April to ensure its continued operations. Guaranteed.
“Gas constraints are a hurdle for almost all power plants and we are already in talks with the oil minister and have also met with gas suppliers to implore them and the federal government is ready to start paying. “I understand that” repaying debts owed to gas supply companies.
“We are going to inject cash in terms of payments, we are going to give them some type of secured debt instrument, we are going to give them access to gas wells in Nigeria that will be used to repay the outstanding debt. We are also considering options for gas supply companies. The impact will start to be felt by April when payments on these loans begin. I have met with the Minister of Finance and the Minister of Budget and Planning and they have assured me that they will look for funds to begin disbursing these loans. It’s a debt,” he said.
CEO of Egbin Power Plant, Mokhtar Bunur, said the availability of gas has affected the power plants as shortages prevent them from operating at full capacity and lead to loss of revenue. He pointed out that these are the main challenges faced.
He emphasized that although the power plant is 40 years old, large investments have been made to ensure the safe operation of the facility, as a failure to generate electricity would create a major imbalance. He emphasized that maintaining continuity is extremely important.
Bonheur further emphasized that the issue of accumulated debt poses new challenges, as there is insufficient liquidity to maintain the factory.
“Currently, only four units are in operation, but the base load is not reached because there is no gas.The gas supply company has informed us that there are some challenges and technical challenges. “But they are working around the clock. Now that the issue has been resolved, we hope to be able to provide gas as soon as possible,” he said.
Source: guardian.ng