Power Firms Want Forex at Official Rate

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  • Power Firms Want Forex at Official Rate

Power firms should be given preferential treatment with respect to foreign exchange, which is needed to procure equipment such as transformers, meters and turbines, the Managing Director, Ibadan Electricity Distribution Company Plc, Mr. John Donnachie, has said.

Donnachie stated this on Monday at a briefing in Ibadan after the tour of the Eleyele 2x15MVA 33/11KV injection substation whose upgrade, according to him, will be completed later this month.

The naira has weakened against the dollar in recent time, currently trading around 460-470 to the dollar at the parallel market and 305.5 per dollar at the interbank market.

The IBEDC MD, who said the company could not get forex at the official rate, also decried the payment for gas supply for power generation in dollars.

He said, “Fundamentally, the liquidity issue in the power sector is very well known. We are short of at least N1tn in the industry. What happens is that we pay less to the Nigerian Bulk Electricity Trading Plc, which is creating the liquidity issue for everyone else in the industry.

“Who is going to take that exchange rate risk in the industry? That is the question we haven’t answered yet.”

Donnachie put the company’s allowable capital expenditure at N5.5bn for this year, saying it was based on the old exchange rate of N198 to the dollar.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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