GENCOS: Nigeria Government Falls Into Local Gas Company’s Debt Trap

The continuous payment of gas supply for the generation of power by the Niger Delta Power Holding Company (NDPHC) has placed a huge debt on the federal government as Nigerian Gas Supplying Company (Accugas) has caused the President Muhammadu Buhari led Government of owing them an outstanding debt of $15.8 million.

According to the report gathered, by The Cable, the gas supplying company has approved a contract with the Federal Government which permits it to receive over $10 million monthly with or without gas supply to the Calabar GenCo, owned by Niger Delta Power Holding Company (NDPHC) Ltd.

Naija News understands that the contract was under the GSA  in May 2017.

However, the report also revealed that in a “notice of non-payment” dated May 29, 2020, and signed by Oge Peters, head of the commercial, Accugas referred to clause 18.5.1 of the natural gas sales agreement dated May 12, 2017, between Accugas and the Calabar GenCo as well as clauses 3 and 4.1 of the support agreement of the same date between NDPHC and the Nigerian Bulk Electricity Trading Plc (NBET).

“A Monthly invoice of USD 17,978,938.76 dated 7th January 2020 issued by the Seller and received by the Buyer on 9th January 2020 of which USD 2,141,176.30 has been paid leaving a balance of USD 15, 837,762.46 (the “Invoice”),” Peters wrote. “Payment in respect of the Invoice was due on 8th February.

Naija News understands that a similar agreement was signed by the Federal Government and the five other generating companies.