Adelabu made this revelation when he was on a working visit to Egbin Power Plc in Ikorodu area of Lagos State on Thursday.
The minister also said he would liaise with the Central Bank of Nigeria to prioritise foreign exchange allocation to the power sector, saying this would boost the ability to ramp up capacity in terms of generating output.
Speaking on the debt being owed stakeholders on the power sector, Adelabu said he was in Egbin to seek the GenCo’s understanding.
“The Federal Government is owing the power generating companies a lot of money; top on the list of the creditors is Egbin Power plant. We don’t want this to cripple their operations. They’ve been magnanimous enough to continue generating, otherwise they could have parked up. We don’t want this to happen to this power asset.
“The Federal Government is now prioritising paying-down on the outstanding debts and I have assured the board and management that effective from April, we will start paying down on debts, as a form of incentive to continue to have them in operation,” he stated.
On the lingering gas shortage, he stated, “Gas shortage has been an impediment to all our gas-fired power plants. We already have discussions with the Minister of State Petroleum Resources (Gas) and we are also meeting with the gas suppliers to plead with them that the Federal Government is prepared to start paying down on the debts that we owe the gas supplying companies.
“We are going to make some cash injection in terms of payment and give them promissory notes. We are also looking at allowing them access to Nigeria’s gas wells so that this will be used to defray the outstanding debts of the gas suppliers over time.
“This will be a thing of the past very soon. We will start seeing the impacts of this from April. I’ve had meetings with the Minister of Finance and Minister of Budget and Economic Planning, and they are promising me that they are going to give us some funds to start paying down on these debts”.
Speaking, the Chief Executive Officer of Egbin Power, Mokhtar Bounour, said the firm is losing huge revenue to the current gas shortage, threatening power generation nationwide.
The CEO noted that the power generating company has not been able to run the plant to full capacity due to low gas supply.
According to him, the plant that can generate 1000MW now generates an average of 400MW, blaming the nonavailability of gas.
On the closed-door meeting with the minister, Bounour said the management had highlighted all the challenges being faced here, saying “They promised to solve them gradually so we can see improvement in the near future”.
He said: “One of the major challenges we are facing right now is gas availability. We don’t have enough gas to run the full capacity of the plant, and we are losing a lot of revenue. This is a 40-year hold plant, we are investing a lot; it requires a lot of effort, and a lot of investments to keep the unit running and safe; and if you don’t generate, you will have a big unbalance.
“The quantity of gas allocated to us is not enough to run the six units. We have received calls from the gas suppliers that they have some technical challenges to sort out. We hope we can receive a good quantity of gas as soon as possible,” he said.
He added that the Federal Government is owing the GenCo to the tune of N1.4tn.
“The second challenge is the cumulative debts. We are having some liquidity issues that we all hope will be solved soon. The Federal Government is owing us N1.4tn, but the Minister has promised that starting from April, we will start seeing improvements, and we are looking forward to it. If the debts are not paid, the business can’t be sustained,” he stated.
The PUNCH recalls that Adelabu said in February that the Federal Government was owing the gas companies up to $1.3bn.
