Forex volatility contributes to power sector challenge – ACCI

The Abuja Chamber of Commerce and Industry Limited says instability in foreign exchange, inadequate liquidity and insufficient gas supply are inhibiting optimal performance of power companies operating in Nigeria’s electricity industry.

The President of the ACCI, Tony Ejinkonye, said this in an interview with the News Agency of Nigeria in Abuja on Monday.

According Ejinkonye, the difficulty in assessing Forex by the Gencos and Discos is preventing them from implementing the foreign technical service agreements with their foreign partners.

He said that the Forex situation was affecting the process of remitting money by the Gencos and Discos to their foreign associates.

This, the ACCI President said, was contributing to the current challenges in the sector.

Ejinkonye said that the issue of pricing and purchasing of local gas in dollars against naira by the Gencos to fire gas plants also accounted for the challenge in the sector.

On the Central Bank of Nigeria’s N213 billion interventions to the sector, Ejinkonye said the utilisation of the fund by operators in the sector was assisting to the advancement of the power industry in the country.

He said the CBN’s stabilisation fund was a development finance intervention to address the deterioration in the nation’s power sector.

He said the disbursement made so far marked a major milestone in the effort of CBN in collaboration with the Federal Government to achieve a contract based electricity market.

He said the disbursement of the fund activated the Power Purchase Agreements by the Nigerian Bulk Electricity Traders and signalled activation of industry contracts for power generation.

Ejinkonye said the disbursement of over N120 billion of the fund as at May 2016 had resulted in the restoration of 905MW of power into the grid due to facility turn around maintenance.

He said the disbursement had contributed to over 25 per cent of the annual capital expenditure budget for the sector.

According to him, reports from Discos have shown that the funds assisted them to execute capacity recovery programmes in some hydro power stations, using the intake under water repair project.

According to Ejinkonye, reports also indicates that the intervention has enabled the DISCOs to provide bank guarantees to Nigerian Electricity Bulk Trader, purchase of over 171,071 units of meters.

He said the meters comprised both maximum demand and single phase meters.

He called for the full disbursement of the balance of the fund, noting that access to the fund would also accelerate advancement in the sector.

NAN