Mr. Babatunde Fashola, the Minister of Power, Works and Housing, has disclosed that the indebtedness of power distribution companies to the Nigerian Bulk Electricity Trading Company has risen to N859bn.
As a result, the NBET has accumulated a total debt of N325.784bn which is meant for the payment of power produced by electricity generation companies and supplied to the Discos.
Power distributors collect electricity bills directly from consumers, make payments to NBET and the bulk trader in turn pays the generation companies.
Briefing journalists in Abuja, Fashola said that Discos had persistently failed to meet their obligation in terms of remittances to the NBET, a development that had grown their indebtedness to the tune of N859bn.
Fashola said, “They (Discos) are content to allow the government bulk trader pay the Genco for the power and receive it under the vesting contract which they are not properly performing because they remit only about 15 to 20 per cent of the power they receive, and have accumulated debts of about N859bn (principal and interest) owed to NBET.”
The minister explained that government, during the privatisation of the power sector, took steps to perform its support and enabling role to private sector by setting up the NBET
“What NBET does is to give confidence to generation companies by guaranteeing to buy bulk power, which is an incentive to Gencos to invest in building more power plants because there is an assured buyer,” he said.
He noted that in real terms, the power that the Discos sell does not belong to them, as they were only distributors for a commission under a vesting contract with NBET.
