In a recent revelation, the Niger Delta Power Holding Company (NDPHC), a federal government-owned power firm, disclosed that the Central Bank of Nigeria (CBN), the Nigerian Bulk Electricity Trading Plc (NBET), and the Nigerian Electricity Liability Management Company owe a collective sum of N190 billion for electricity supply. The Managing Director and Chief Executive Officer of NDPHC, Chiedu Ugbo, shared this information during a media briefing in Lagos on Monday.
Ugbo highlighted that the N190 billion debt had accumulated from 2015 to May 2023, with NBET being the major contributor to this indebtedness, although he did not specify the exact amount owed. He emphasized that the outstanding debt has hindered the NDPHC from meeting crucial obligations, including operational expenditures, payment to gas suppliers, and maintenance of spare parts.
The Managing Director explained, “Huge indebtedness by the market to NDPHC runs into hundreds of billions, N190 billion as of May for unpaid invoices. NDPHC is also not paid for availability but only as dispatched, thereby depriving NDPHC of hundreds of billions since 2015 when the Transitional Electricity Market was declared, and the government has so far been denied revenue as high as N3 trillion.”
Ugbo further detailed the domino effect of the debt on NDPHC’s operations, stating that the inability to settle outstanding payments has led to disruptions in the supply chain. The company, with a nameplate capacity of 4,000MW across ten plants, is currently generating only 975MW due to financial constraints.
To navigate the challenging financial landscape, Ugbo highlighted that the company has implemented cost-cutting measures and relied on internally generated revenue, along with interventions from the Federal Government. However, he emphasized the urgent need for private capital mobilization to address liquidity challenges and invest in critical areas like transmission.
Executive Director, Generation, Engr. Abdullahi Kassim, elaborated on NDPHC’s strategy to address challenges through the ‘Light-up Nigeria Initiative.’ This program aims to leverage generation assets to deliver reliable power to eligible customers, electricity distribution companies, and third-party project developers. The initiative, led by NDPHC’s Chairman and Vice President, Sen. Kashim Shettima, focuses on sales to bulk purchasers and developers, offering a potential solution to monetize NDPHC’s stranded capacity and illuminate businesses and homes.
