Egbin Power plant owed $202 million, debt payments

Nigeria’s largest power plant said that it’s owed more than N40 billion ($202 million) and is facing persistent gas supply shortages despite boosting capacity, highlighting continuing challenges in ending daily blackouts since private companies took over the state utilities two years ago.

Egbin Power Plc’s Chief Executive Officer Dallas Peavey Jr. said the generating plant was owed the amount from an outstanding cumulative balance for 10 months and that the West African nation’s central bank had delayed “legacy” debt payments. Peavey’s comments were cited in a statement on Tuesday issued by Nigeria’s Bureau of Public Enterprises.

Peavey said 46 billion naira had been invested in the 30-year-old plant in Lagos, the commercial capital, co-owned by Nigeria’s Sahara Group and Korea Electricity Power Corp., to boost its capacity from less than 50 percent to 85 percent since it took over the asset from the Nigerian government in 2013. Egbin now generates an average of 1,100 megawatts.

The partial sale of Nigeria’s state power generation and distribution companies two years ago was supposed to help end daily blackouts in Africa’s largest economy. Yet, private investors found the companies they bought weren’t financially viable and some were also indebted, prompting the intervention of Nigeria’s central bank. The bank designed a 213 billion naira bailout package last year to cover revenue shortfalls and and help companies meet debt-service obligations on bank loans of almost 500 billion naira.

Peavey said in an interview in August that the Egbin plant would shut down if the government didn’t take “concrete permanent steps” to address the state of its national grid and reduce losses.