Toba Owojaiye reporting
Osogbo, Osun State
The Nigerian Senate has turned its attention to the mounting N1.6 trillion legacy debt owed to Egbin Power Station and other generating companies (GenCos), raising questions about the sustainability of the power sector under such financial strain.
Truth Live News gathered that during an oversight visit to Egbin Power Station, one of Nigeria’s largest electricity generation plants, Senator Emmanuel Udende, Vice Chairman of the Senate Committee on Privatisation and Commercialisation, praised the resilience of GenCos like Egbin for maintaining operations despite the financial burden.
“It’s quite huge, and yet they are still operating. I’m impressed with their spirit,” Udende remarked, referencing the debt that has hindered the sector’s growth and efficiency.
The legacy debt, largely inherited from the privatisation of state-owned power assets in the early 2000s, continues to hamper the financial health of GenCos, many of which struggle to maintain consistent power output. Payments for power supplied to the national grid remain delayed, leaving operators grappling with cash flow issues.
In a statement to reporters, Udende emphasized the Senate Committee’s commitment to resolving the issue, promising a detailed review of the debt and legislative solutions to mitigate its impact.
“Once we get the full report, we will look at what we can do to ameliorate the situation,” Udende said.
The committee plans to engage with the Bureau of Public Enterprises (BPE), tasked with overseeing privatisation efforts, to address the sector’s financial challenges. Udende suggested that solutions could come in the form of motions or new legislation aimed at alleviating the debt burden on GenCos.
“We are legislators, and we can either come by way of motion or legislation. We will look at it holistically,” Udende explained.
Udende also highlighted other critical issues plaguing Nigeria’s power sector, including foreign exchange volatility, infrastructure vandalism, and frequent national grid collapses. These challenges, coupled with the debt crisis, have contributed to the sector’s instability.
One particular concern is the suspected sabotage of grid infrastructure, which Udende suggested might play a role in the recurring power outages. He promised that the Senate would address this issue once formal investigations provide more clarity.
“We are thinking that there are acts of sabotage,” he noted.
Reflecting on the sector’s privatisation, Udende admitted that the outcomes have fallen short of expectations. Several privatised power assets continue to face operational difficulties, raising doubts about the long-term viability of the initiative.
“Some of the privatised assets are still struggling,” Udende acknowledged. “It’s clear that we need to take a closer look at the privatisation process and its long-term impact on Nigeria’s economy.”
The Senate’s intervention comes at a time when the power sector is at a crossroads. Stakeholders are eagerly awaiting actionable steps that will address the debt crisis and restore stability to the national grid. However, the resolution of these issues will require a concerted effort, combining legislative action, regulatory oversight, and collaboration with industry stakeholders.
The Senate Committee’s upcoming engagements with the BPE and affected GenCos could provide the much-needed framework for a sustainable power sector. Whether these efforts will succeed in reversing the sector’s challenges remains to be seen.