Fed Govt urged to extend forex allocation to power firms


For a stable power supply, the Federal Government should allocate foreign exchange to the power sector.

This, according to the chairman, Egbin Power Plc, Mr. Kola Adesina,  will  help the sector’s players to perform better.

He urged the Federal Government to allocate foreign exchange (forex) to power sector, as it does to their oil and gas counterparts, to enable them provide stable power.

At a stakeholders’ forum in Lagos, he appealed to the government to help power firms recover some of their debts  to enable them improve their productivity.

He said the allocation of forex and recovery of debts  were two major issues that should  be addressed to boost the industry.

Adesina said access to foreign exchange by operators was critical to the growth of the sector. He said the failure of the government to provide the sector with incentives meant the growth of the sector would further be impeded.

He said investors were operating in a harsh foreign exchange regime, in view of the significant drop in the value of naira, adding that this has negatively impacted on their operations.

He said operators need foreign exchange to buy equipment from the Original Equipment Manufacturers (OEMs) abroad.

He said: “One of the most critical issues bedeviling the operation of power firms is unfavorable foreign exchange mechanism. At the point of acquisition of the assets of Power Holding Company of Nigeria (PHCN) in 2013, the exchange rate was N155 per dollar. Thereafter, the rate fell to N199 per dollar at the official market.

“Invariably, there is the need for the government to allocate foreign exchange to both the operators of both the power generation companies (GenCos) and power distribution companies (DisCos) in the country; the same way it provides for operators in the oil and gas industry.”

He said this would enable power firms to get the  energy mix right, as well as help the country to record industrial growth.

Adesina said the management has started feasibility studies on how to double the capacity of Egbin power s plant. He said the company’s growth plans include increasing electricity generation, construction of industrial power park and investing in renewable energy in the Northern.

According to him, the park would help in promoting the small, medium and large scale enterprises and further move the  economy forward.

“We, at (Egbin), would definitely overcome some of our challenges. As soon as the coast gets clearer, we would invest more in the sector. We, at Sahara Group, Egbin and KEPCO, are committed to the vision of electrifying Nigeria,” he said.

The sector had tried to reduce its debt burden, caused by failure of some customers to pay their bills. Also, the operators have been asking for concessions to import equipment into the country for increased production.

source: http://thenationonlineng.net/fed-govt-urged-to-extend-forex-allocation-to-power-firms/