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No Incentive to Increase Power Generation, Say Gencos

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  • No Incentive to Increase Power Generation, Say Gencos

As households and businesses continue to lament the nation’s electricity woes, power generation companies in the country have said there is no incentive for them to increase output from their plants.

The Gencos said their total generation capacity rose to 7,383.04 megawatts in 2018 from 4,214.32MW in 2013, when the power sector was privatised by the Federal Government.

Total power generation, which plunged to 2,938.5MW last Wednesday, rose to 4,305.5MW as of 6am on Monday, according to data from the Nigeria Electricity System Operator, an arm of the Transmission Company of Nigeria.

The system operator put the installed generation capacity at 12,910.40MW; available capacity at 7,652.60MW; transmission wheeling capacity at 8,100MW; and the peak generation ever attained at 5,375MW.

The Executive Secretary, Association of Power Generation Companies, the umbrella body for the Gencos, Dr Joy Ogaji, in a telephone interview with our correspondent, said the limitations of the transmission and distribution networks as well as a lack of payments to Gencos were a drag on increased generation.

“Consistently, from January to December 2018, we had available generation capacity of 7,000MW and above, but the system was taking a maximum of 4,000MW. So, does that incentivise any investor to increase again? There is no incentive to increase generation or to expand capacity, because as we are increasing, they are not taking it,” she said.

Ogaji said the association did an analysis of how much generation capacity was available, how much was taken and how much was stranded from 2013 to 2018.

She said, “From 2013, the power taken did not change at all. It was just hovering around 3,000MW until it rose to 4,000MW in some days, out of over 7,000MW of available generation capacity. And who pays for the difference? No one. That is why the system can just continue to reject load because nobody is paying for it; if you are paying for it, you will be compelled to take more.

“So, the Nigerian Electricity Regulatory Commission needs to stand up and make the Discos take as much as is available because that is why the Gencos signed their performance agreements.”

In early February, the Group Managing Director, Sahara Power Group, Mr Kola Adesina, said work was on-going to make the installed capacity of Egbin Power Plc, the nation’s biggest power station, available to consumers at the end of the month.

Egbin is one of the operating entities of Sahara Power Group, which is an affiliate of Sahara Group.

“We are striving towards ensuring that at the end of this month, Egbin’s installed 1,320MW will be available to Nigerians. However, two restrictions we usually would have are lack of gas supply and transmission evacuation. So, if those two constraints are there, it is going to be impossible for us to deploy the 1,320MW,” Adesina had said.

Government-owned Nigeria Bulk Electricity Trading Plc buys electricity in bulk from Gencos through Power Purchase Agreements and sells to the distribution companies, which then supply it to the consumers.

The Federal Government, in March 2017, approved N701bn payment assurance guarantee by the Central Bank of Nigeria to help Gencos meet gas payment obligation starting from January 2017 to December 2018.

“The guarantee has ended. Up till now there is no plan for payment to Gencos, apart from the 26 per cent the Discos are paying. Gas suppliers are not ready to accept 26 per cent payment for the gas they sell to Gencos,” Ogaji said.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

IMF to Review Nigeria’s Growth Forecast Amid Destruction of Businesses, Properties

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IMF Says it May Review Nigeria’s Growth  Amid Recent Development in the Country

Following the destruction of businesses and properties that trailed the #EndSARS protest, the International Monetary Fund (IMF) has said it may review the nation’s growth forecast in view of the new development in the country.

Abebe Selassie, the Director, African Department, International Monetary Fund, made the statement while responding to questions during a virtual IMF press conference on the economic outlook of Sub-Saharan Africa on Thursday.

According to him, the protest is difficult given that Lagos is a very important economic hub and contributes to the overall Nigeria activities.

Selassie said, “On the growth projections in Nigeria, I mean, these protests happened of course, after we had closed, after the period where the data we looked at in making the growth projections for this economic outlook.

“And much will depend really on how these protests evolve.

“Lagos of course, is a very important economic hub and contributes quite a bit of economic activity to overall Nigeria activities.

“So, if these persist and are showing significant effects on economic data, we will internalise them in due course.”

He further explained that the nation’s economy had been a difficult one in the last four years ever since oil prices plunged in 2015-16.

He said, “I think this is exactly why we have been on the record in Nigeria about how really critical it is to get all of the policy induced barriers out of the way to facilitate stronger economic growth.

“For the government to do more to raise revenues through the area of non-oil resources to be able to invest in health education which would, you know, allow people to be more successful at getting jobs but also improve the economy’s potential.

“So, I think that development agenda that Nigeria has, I think, has to be tackled with gusto and vigor so that the millions of jobs that the country needs can be created.”

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Economy

Oil Marketers Lose Millions as Hoodlums Set Petrol Tankers on Fire

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Oil Tankers Burnt by Hoodlums as Marketers Lose Millions to Protest

Oil marketers lost millions of Naira to repeated attacks by hoodlums exploiting the #EndSARS protest.

The Independent Petroleum Marketers Association of Nigeria on Thursday said hoodlums have been attacking their trucks since they hijacked the protest earlier in the week.

The association said three petrol laden trucks were burnt again on Thursday in Warri, Delta State.

This came as the Board of Trustees of the Oil and Solid Mineral Producing Area Landlords Association of Nigerian urged protesters across the country to sheathe their swords as the destruction of oil assets and others had become alarming.

Chief Chinedu Ukadike, the Public Relations Officer, IPMAN, who spoke in Abuja said three petrol tankers with petroleum products estimated at about N90 million were set on fire on Thursday.

He said, “The protesters are burning our petrol trucks as we speak right now in Warri. They are burning three trucks. The cost or value of the content in those trucks is about N90m.

“That is outside the worth of the trucks that are being burnt. This is why we asked our tanker drivers to park or temporarily halt the movement of products.”

Ukadike said the association decided to halt the movement of petroleum products on Wednesday to avert a further disaster that could arise attack of oil tankers by angry protesters.

That advise on the temporary halt of tankers movement was vital, particularly for volatile locations where protesters are highly aggressive. So that is what is happening now in Warri, the petrol trucks of oil marketers are being burnt,” he stated on Thursday.

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Economy

LCCI Says FG Loses N700bn to #EndSARS Protest in 12 Days

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Nigeria Loses Over N700 Billion to #EndSARS Protest in 12 Days

The Federal Government lost over N700 billion to the #EndSARS protest in twelve days, according to the Lagos Chamber of Commerce and Industry (LCCI).

Mrs. Toki Mabogunje, the President, LCCI, disclosed this while reviewing the economic implications of the just ended #EndSARS protest.

Mabogunje, who appreciated the value of citizens engagement and the demand for accountability which the protest represents, lamented the negative effect on the nation’s economy.

She said, “These are in consonance with democratic norms. They also form vital ingredients for good governance.

“LCCI is however concerned about the negative impact that the protracted nature of the EndSars protests has on business activities across the country.

“Over the past twelve days, economic activities have been crippled in most parts of the country and has been particularly profound in the urban areas.

“The Nigerian economy has suffered an estimated seven hundred billion naira (N700 billion) loss in the past twelve days.”

She further said the protest has reawakened the need to reform the shortcomings in the nation’s political governance, however added that to protect livelihoods of Nigerians, including business community, the protesters need to move to next stage of civic engagement.

This is necessary to reduce the massive disruptions, blockades and barricades around our major cities and interstate highways. These actions have been at great cost to the economy and the welfare of Nigerian citizens. It should be noted that our economy is still reeling from the shocks of the Covid 19 Pandemic and struggling to recover from its devastating effects,” she added.

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