The Managing Director and Chief Executive Officer, Niger Delta Power Holding Company (NDPHC), Engr. Jennifer Adighije, has said that inefficient liquidity and cash-flow is hindering optimal power generation and even significant investments.

Speaking on Channels Television’s Politics Today on Thursday, The NDPHC boss enumerated that paying off the money owed to generation companies (GenCos) would enable them to make significant investments in converting some power plants to combined cycle towards greener energy.

Responding to Gas shortage issue and pushing for greener energy sources, she said, “Well, because of the liquidity and cash-flow crisis, we are not able to procure as much gas volumes as we would require. power generation is contingent on several factors, gas availability, gas supply, even gas infrastructure challenges.

“For instance, I have a power plant in Calabar. As we speak, there was a major vandalization on the gas pipeline, which has constrained us from taking up that gas optimally. And in fact, the company has had to declare a first measure. So these are limitations that constrain us from delivering optimally.

“Absolutely, in the master plan of the National Integrated Power Plant (NIPP), the NIPP phase one was to implement the gas-fired power plant and phase two was to implement renewable generation sources, through solar, hydro and greener sources of power generation. And so if we also are able to unlock liquidity that we are being owed, we would also be able to make significant investments in converting some of our power plants to combined cycle, so that we can operate in a more eco-friendly manner.”

According to her, NDPHC are currently owed N600 billion, with N400 billion of that debt attributable to the federal government through the Nigerian Bulk Electricity Trading Company PlC (NBET).

She explained that prior to the enacting of the Electricity Act 2023, the NBET had the exclusive rights to purchase electricity from the NDPHC in bulkband and sell to the distribution companies (DisCos) but due to the dynamics of the markets, the debt was accumulated basically from two sources – tariff shortfall and market shortfall.

“So when you combine the tariff shortfalls and the market shortfalls, you know, who bears that burden? You know, it’s typically the gencos that bear that burden because our invoices or the invoices that we issue to the bulk electricity trading company are not settled fully.”

When responding to who owe this money, she said, “Well, It is combined because we have customers that are government customers, and then we also have private customers in terms of off-takers, bilateral customers, eligible customers that are also owing.

So combined, yes, we’re being owed about 600 billion. About 400 billion is being owed by the government through the bulk electricity trading company.

“Tariff shortfalls, as we know, and the Honorable Minister has really been championing such a noble cause, because the electricity that we have consumed over the years hasn’t been cost-reflective. And so the tariff shortfalls, and then market shortfalls also arising from the complexities in the electricity market, the losses, the discos are not able to remit optimally.

In the light of this challenges, the NDPHC MD, commended the Minister of Power, Adebayo Adelabu over the recent electricity tariff adjustment – especially the cost-reflective tariff introduced for Band A customers that has helped save GENCOs from financial collapse.

According to her, “Prior to the implementation of the cost-reflective tariff on band A, only 10% of the invoices that we present to the bulk electricity trading company are actually settled by the government. But with the passing of the Electricity Act and then the implementation of the band A, which actually account for 15% of the market, the sector liquidity ramped up from 1 trillion to 1.7 trillion, which is 70% increase by simply implementing a cost-reflective tariff on 15% of the market.

“So I really want to commend, the Honorable Minister of Power, Dr. Adebayo Adelabu, for the boldness and the courage to effect this policy that has saved the gencos from collapse. So, now we are able to get about 30% of invoice settlement on the invoices that we issue. And that has also helped our liquidity. Before then, we were unable to meet our operational, OPEX and CAPEX obligations, but now we are able to develop a coping mechanism and we are surviving.”

Engr. Adighije also stressed on the benefits of N400 billion if the government pays off. She stated that, “It would do a lot. Our power plants are gas-fired. And so what that means is that natural gas is my feedstock. That’s my intake. And gas is not cheap, right? I require 25 million scope of gas to fire a unit every day, and gas is priced in US dollars – which is priced at about $2.4 per MMBT.

Speaking factually to the possibility of Nigerians getting stable 24/7 power supply, Engr Adighije, said power generation is not cheap, and the only sure way to achieve this, is either Nigerians pays optimally for quality, uninterruptible electricity, or government subsidies optimally to enable the GenCos generate efficiently and transmit to the last mile in the most cost-effective manner.

“So, if we want power stable, we need to start thinking of paying more. That is the reality, not necessarily, because the subsidies. For instance, can still be applied more effectively and more smartly through smart meters. You have AI-enabled meters now that can actually apply subsidy on consumption, you know, and that way it is even more accountable. So the government can still apply subsidies in a more cost-effective manner, actually, and then electricity will be delivered optimally,” she added.

As the backbone of the GenCos, Engr. Adighije highlighted the company’s generation capacity – the largest fleet of generating units with 10 power plants spread across the country with 28 gas fire turbines and three steam turbines, totalling an installed mechanical capacity of 3,500 megawatts, representing 25 percent of the GenCos space.

“Our philosophy is end-to-end. It’s part of our mandate. So, we have a lot of stranded projects that we are unable to complete because of the liquidity crisis, but in spite of challenge, this doesn’t deter us. Under my leadership, I came up with a strategic implementation plan to ensure that as we ramp up generation capacity. In eight months, I have been able to restore six generating units, which accounts for about 800 megawatts, an added mechanical availability to the grid. We have completed some transmission line projects and some distribution projects, high-impact projects that would ensure that the common good of Nigerians are met.”