Yemisi Izuora/Ijeoma Agudosi
Managment of Egbin thermal power plant in Lagos said they have commenced capacity upgrade of the plant to expand generation to 2,670 mega watts (MW)by 2019.
But the plant which is currently generating 1,100 MW from 1,320 installed capacity is facing serious challenge to sustain generation following N39 billion debt by federal government.
The huge debt profile is equally creating some bottleneck in the company’s planned capacity expansion initiative.
Also, the non activation of Power Purchase Agreement (PPA) by government is also posing operational challenges in the system.
Addressing the media in Lagos yesterday, chairman of Egbin Power Station Mr. Kola Adesina said the management has fulfilled all performance agreement entered into with government upon acquisition of the plant in November 2013.
He disclosed that management is planning to raise the plants capacity by additional 1,350mw to hit 2,670 mw by 2019.
Adesina said the Egbin plant prior to its privatisation was in deplorable situation generating about 500mw.
“The plant before then did not undergo any major overhaul, the 6 units were not functional, and in particular unit 6 was not working for 10 years.
But to date we have rehabilitate all units and currently generating 1,100mw” he said.
Apart from the total turn around, he also said managment has significantly secured security of the facility to avert infringement by unauthorised persons.
“We now have in place new distributed control system of global standard, fire alarm detection system that was not in place earlier, and have installed gas meter system to capture quatum of gas received.
We have also improved on our operational performance, but government is still owing us for electricity generated” he lamented.
According to him, no matter how keen you desire to transform your nation, or patriotic zeal, the necessary impetus is lost when you don’t pay for services rendered.
At present, from November 2013 to date, government is owing Egbin N39 billion.
Speaking further Adesina, pointed out that “Upon acquisition, the exchange rate was N158 to a Dollar, and now it is N199.5 to a dollar, and you can see the huge differential and for a company that source tools abroad to keep the plant running and whose business plan upon acquisition is predicated on N158 it is impacting on us negatively.
Adesina also criticised some institutional issues that have not been resolved which include regulatory and policy matters.
He noted that the business environment is unpredictable which affected the company’s ability to access fund from the N213 billion Central Bank of Nigeria (CBN) intervention initiative.
“Under the PPA government is to pay for electricity generated, but since it is not in place, and in some cases where we generate 1,100 mw and we are asked to step down to 700 mw due to transmission issues then who pays for the balance” he argued.
For the planned expansion, the chairman said the company has embarked on feasibility study, Environmental Impact Assessment (EIA), and the Front End Engineering (FEE) and is to put all in perspective with the Engineering Procurement Contract (EPC).