Power generation companies in Nigeria, popularly known as GenCos, have sued Nigeria’s central government at a federal court in the country’s capital of Abuja, over alleged non-payment of debt in excess of N1 trillion.
In the papers of the suit filed the power companies, according to Businessamlive, they have also accused the government of giving preferential treatment to two of their competitors, Azura Power West Africa Limited and Accugas Limited, to the detriment of the Nigerian electricity supply industry and the power sector as a whole with intent to harm their business interests.
The GenCos, which said members were on the verge of collapse over the debts, currently generate 80 percent of the power consumed in Nigeria.
The defendants in the suit include the Federal Government, the Central Bank of Nigeria, Minister of Power, Works and Housing, Nigeria Bulk Electricity Trading Plc, Azura, and Accugas.
The GenCos specifically 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 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.
Represented by Mainstream Energy Solutions Limited (Mainstream), Transcorp Power Limited (Transcorp Power), Egbin Power Plc (Egbin) and Northsouth Power Company Limited (Northsouth), the GenCos said that the defendants have continuously meted out unfair treatment to them, their investors and suppliers.
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 percent) not later than 45 days of invoice submission and upon delay in payment, be paid with interest at the agreed rate.
The GenCos noted that failure to pay them has caused them to default in meeting their obligations to their lenders, O&M contractors, equipment manufacturers, service providers and other persons and entities.
The GenCos put the total amount owed them for electricity supplied at approximately N800 billion, adding that when interest is added, it amounted to over N1 trillion.