Power generation companies drags federal govt to court

Power Generation Companies (GENCOs) have sued the federal government for alleged discriminatory treatment of the companies and their gas suppliers with intent to harm their business interests.

The GENCOs also accused the government of conferring preferential treatment on Azura Power West Africa Limited and Accugas Limited to the detriment of the Nigerian Electricity Supply Industry and the power sector as a whole.

The suit filed at the Federal High Court, Abuja, has the GENCOs represented by Mainstream Energy Solutions Limited (“Mainstream”), Transcorp Power Limited (“Transcorp Power”), Egbin Power Plc (“Egbin”) and Northsouth Power Company Limited (“Northsouth”) as the plaintiffs in the suit.

According to the suit, the GENCOs are contending that the Nigerian government and its agencies have treated and intends to continue treating the GENCOs, their investors and suppliers unfairly and in a discriminatory manner.

The GENCOs  also claimed that NBET has consistently defaulted in paying them for all electricity generated and put on the national grid in breach of its contractual obligation, which required that the GENCOs be paid fully not later than 45 days of invoice submission, and upon delay in payment be paid with interest at the agreed rate.

The GENCOs put the amount owed them for electricity generated and supplied by them is approximately N800 billion, adding that together with capacity and interest payments due to them, they are owed in excess of N1 trillion.

But they claimed that as a way to addressing the huge mounting indebtedness of FG and NBET to the GENCOs, the FG working with the Ministry of Power, Works and Housing, NBET, CBN and the GENCOs created as a temporary relief, with the N701 billion Payment Assurance Facility under which the GENCOs were to be paid for all electricity generated and supplied from January 2017 to December 2018.

The process of working out the facility and the presentation of same to the GENCOs clearly indicated that the N701 billion Facility was meant to pay existing GENCOs as at the time the facility was put in place, as the target beneficiaries.

The GENCOs however said that they are aggrieved that the government has not kept faith with payments from the N701 billion facility as payment timelines are not clear, regular or consistent.

Again, they said only 80% of invoiced amounts are paid whenever the FG chooses to pay, with 90% of gas suppliers invoices paid directly to gas suppliers out of the said 80% payment and whatever is left of any payment tranche is hardly sufficient for any meaningful activities of the GENCOs.

They claimed further that the outstanding payments owed the GENCOs before the introduction of the N701bn Facility and the monthly shortfall payment of 20% of invoices have continued to pile up without any clear sight of how these will be paid to the GENCOs.

The suit has been fixed for the hearing of the GENCOs Application for Interim Injunction on April 16 by Justice Binta Nyako of Federal High Court, Abuja.