The Chairman, Egbin Power Station, Mr Kola Adesina, yesterday said the N39 billion being owed the firm by the Federal Government is crippling its expansion plan.
Adesina, who spoke with reporters in Lagos, said the debt has been hanging since November 2013.
He said the debt was equally creating some bottleneck in the company’s planned capacity expansion initiative.
The non-activation of Power Purchase Agreement (PPA) by government, he said, was also posing operational challenges in the system.
The chairman said the management of the firm had fulfilled all performance agreement it entered into with government upon its acquisition in November 2013.
He said the management was planning to raise the plant’s capacity by additional 1,350megawatts (Mw) to hit 2,670Mw by 2019.
According to him, about $1.3 million will be spent on the proposed expansion programme of the plant.
Adesina said the 1.100Mw Egbin plant prior to its privatisation was in deplorable condition, generating about 500Mw.
“The plant before then did not undergo any major overhaul, the six units were not functional and in particular unit six was not working for 10 years.
“But to date, we have rehabilitated all units and currently generating 1,100Mw,’’ he said.
He also said management had significantly secured the facility to avert infringement by unauthorised persons.
“We now have in place new distribution control system of global standard, fire alarm detection system that was not in place earlier and have installed gas meter system to capture quantum of gas received.
“We have also improved on our operational performance, but government is still owing us for electricity generated,’’ he lamented.
According to him, no matter how keen one desire to transform one’s nation may be, the necessary impetus is lost when one doesn’t get paid for services rendered.
Adesina, pointed out that “upon acquisition, the exchange rate was N158 to a dollar and now it is N199.5.
“The huge differential is affecting us negatively considering that the company sourced for tools abroad to keep the plant running and our business plan upon acquisition is predicated on N158,’’ he said.
Adesina also criticised some institutional issues that have not been resolved, including regulatory and policy matters.
He noted that the business environment was unpredictable and had affected the company’s ability to access fund from the N213 billion Central Bank of Nigeria (CBN) intervention initiative.
“Under the PPA, government is to pay for electricity generated, but since it is not in place, and in some cases where we generate 1,100Mw, we are asked to step down to 700 Mw due to transmission issues, who pays for the balance?’’ He asked rhetorically.
For the planned expansion, the chairman said the company has embarked on feasibility studies and Environmental Impact Assessment (EIA).
He added that the Front End Engineering (FEE) is to put all in perspective with the Engineering Procurement Contract (EPC).
