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A payment of N2.513 billion has been made directly to gas suppliers on behalf of Geregu Power Plc by the Gas Aggregation Company Nigeria (GACN).
The payment made on 20 April 2023 was part of reported trade receivables and trade payables due Geregu, according to information in Geregu’s financials seen by MoneyCentral.
GACN was established in 2010 by the federal government in furtherance to the National Domestic Gas Supply and Pricing Regulation 2008, for the implementation of the Nigerian Gas Master Plan (NGMP) and management of domestic supply of gas to the market.
The company was set up to ensure adequate supply of gas to the strategic sectors of the domestic market including the power sector, for the purpose of enhancing natural gas usage to achieve the much-desired industrialisation in Nigeria.
Gencos have repeatedly blamed their inability to ramp up power generation from the current 4,500 megawatts (mw) on the reluctance of the gas companies to supply them gas without upfront payment and without clearing the N1 trillion legacy debt.
The Gencos had also complained of non-payment of their N1.6 trillion debt being for energy generated and other contractual obligations.
The gas producers have been calling on the federal government to pay up the legacy debts owed them for gas supplied to thermal power generating companies, amounting to about $1 billion.
They said defraying the debt in addition to introducing a free market pricing regime for the gas sector would guarantee the continuous operation of thermal power generating companies in the country.
Geregu Power Plc bought an underperforming State owned power asset in the privatization exercise of 2013, with effective capacity of less than 100 megawatts (MW), and has ramped up its capacity to 435 MW, with 70% – 80% of power generated being fed to the grid.
As part of its growth plans, Geregu Power Plc is bidding to acquire one of the National Integrated Power Plants (NIPPs) being put up for sale by the Federal Government through the Bureau of Public Enterprises (BPE).
The power plant Geregu is seeking to acquire is Geregu 3, a 440 MW plant close to its current operations.
“With the acquisition, we will run a combined cycle operation to ramp up capacity to 1,000 MW in 2 – 3 years,” Akinfemiwa, CEO, Geregu Power Plc, said.