Electricity firms sues federal government over one trillion debt. The power crisis in the country may worsen as the Power Generation Companies in Nigeria, GENCOs, have dragged the Federal Government before a Federal High Court sitting in Abuja, over alleged preferential treatment to two of its competitors with intent to harm their business interests.
The GENCOs, which said members were on the verge of collapse over debts in excess of N1 trillion currently generate 80 per cent of the power consumed in Nigeria.The the Federal Government was accused of giving preferential treatment to Azura Power West Africa Limited and Accugas Limited to the detriment of the Nigerian Electricity Supply Industry and the power sector as a whole.
The GENCOs, represented by Mainstream Energy Solutions Limited (Mainstream), Transcorp Power Limited (Transcorp Power), Egbin Power Plc (Egbin) and Northsouth Power Company Limited (Northsouth), are arguing that the defendants, have continuously meted out unfair treatment to them, their investors and suppliers.
Specifically, the GENCOs stated that they had made huge sacrifices, bearing the excruciating burden of not being paid for electricity generated and sold to the Nigerian Bulk Electricity Trading, NBET Plc and are facing the threat of business failure as a result of their huge indebtedness to banks and financiers, which provided the foreign currency-denominated acquisition loans with which the power plants were acquired from the Federal Government.
They alleged that NBET has consistently defaulted in paying them for electricity generated and put on the national grid in breach of its contractual obligation, which required that the GENCOs be paid in full (100 per cent) not later than 45 days of invoice submission and upon delay in payment, be paid with interest at the agreed rate.
In a suit filed by 13 GENCOs, the defendants are the Federal Government, the Central Bank of Nigeria, CBN, Minister of Power, Works and Housing, Nigeria Bulk Electricity Trading Plc, NBET, Azura and Accugas.