Senator Emmanuel Udende, vice chairman of the Senate Committee on Privatisation and Commercialisation, has raised concerns about the N1.6 trillion legacy debt owed to Egbin and other debts owed to generating companies in the power sector.
Speaking to reporters after an oversight visit to Egbin Power Station, one of Nigeria’s largest electricity generation plants, Udende praised the company’s resilience despite the staggering debt burden.
The N1.6 trillion owed to power generation companies is a significant financial strain on the sector, but Udende expressed admiration for the efforts of GenCos like Egbin, which continues to operate despite the ongoing financial challenges.
“It’s quite huge, and yet they are still operating. I’m impressed with their spirit,” Udende remarked.
He acknowledged that the ongoing debt issue is a serious concern for the energy sector and promised that the Senate Committee would take action.
“Once we get the full report, we will look at what we can do to ameliorate the situation,” Udende said, emphasising that the committee’s oversight function would explore ways to address the debt crisis.
The legacy debt has become a major impediment to the efficient operation of privatised assets in Nigeria.
Read also: Egbin says gas key to Nigeria’s energy future
Many of the GenCos, which took over the operations of state-owned power plants in the early 2000s, have struggled to maintain consistent output due to financial constraints.
BusinessDay findings showed trillion naira debts is owed to these companies for the provision of power to the national grid, but payment delays and the failure of the government to settle these debts have exacerbated their financial difficulties.
Udende said that the committee would explore various legislative solutions to help mitigate the impact of the debt on the energy sector.
“We are legislators, and we can either come by way of motion or legislation. We will look at it holistically,” he stated. The committee also plans to invite the Bureau of Public Enterprises (BPE), which is responsible for overseeing the privatisation of state-owned assets, to engage with the affected companies and explore possible solutions.
In addition to the debt crisis, Udende highlighted other challenges facing the energy sector, including foreign exchange volatility, infrastructure vandalism, and the frequent collapse of the national power grid.
He acknowledged that these issues have contributed to the sector’s instability and expressed his commitment to working on solutions.
“We are going to look at these challenges holistically and bring out a solution,” Udende said.
One key concern that has affected the power sector in recent years is the frequent collapse of the national grid, which has led to widespread power outages across the country.
Udende suggested that sabotage could be playing a role in the grid’s instability and vowed to address the issue once a formal report is submitted to the committee.
“We are thinking that there are acts of sabotage,” he noted, adding that further details would be provided in due course.
Despite these challenges, Udende emphasized that the privatisation process has not been entirely successful, with several privatized companies continuing to face operational difficulties.
“Some of the privatized assets are still struggling,” he admitted. “It’s clear that we need to take a closer look at the privatization process and its long-term impact on Nigeria’s economy.”
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
