Sponsored Links

PARIS, OCTOBER 20, 2016: (DGW) Nigeria power sector is is on the verge of collapse as a result of the  scarcity of foreign exchange which has in no small measure hindered its smooth operation, The Nation has reported.
 What has actually hindered the smooth operation of the power  sector is the imbalance in the foreign exchange market as dollar exchanges for N470 on the parallel market which if available , the cost remains prohibitive.
The implementation of flexible exchange rate which allows sourcing foreign exchange from multiple sources has not helped matters either
Another factor is the inability of the operating firms to repay loans they obtained to buy assets  of the Power Holding Company of Nigeria (PHCN) back  in 2013.
Also, it is difficult for the firms to get enough dollars to import meters, transformers, and other materials needed to meet their obligations to customers, owing to this, The Nation further reports that the operators may be forced to further prune down the cost of operation if naira continues its free fall amid the recession in the economy, by downsizing the workforce and reducing output.
The Group Leader Generation, Sahara Power Group, Micheal Uzoigwe, said the lopsidedness in the exchange rate was affecting activities in the industry.
According to him, the high cost of foreign exchange has resulted in price increase of spare parts by 90 per cent. He  added  that the issue was having ripple effects on the sector and the economy,  explaining that output in the value chain has reduced to an abysmal level due to high cost of obtaining dollar in Nigeria.
Uzoigwe said: “Getting enough dollars for transactions and achieving optimal capacity is a problem to electricity generation companies (GenCos). The reason is because the price of gas is denominated in dollar and that power generation companies are unable to get enough money to buy the product. He said firms were paying N165 per unit of gas two years and they are now paying between N460 to N470 for the same unit of gas in 2016, then there is a problem.

“Two things are likely to happen. First, the GenCos would not be able to get enough millions of cubit of gas for generation. Secondly, the firms would find it extremely difficult to break even in the industry.”
Uzoigwe said Sahara Power Group, bought Egbin power plant for $400million in 2013 when dollar exchanged for N165, adding that the Group now pays a lot to service the debt.
“We at (Sahara Group) bought Egbin Power Plant for $400million few years ago. The Group took loans from the banks to buy the plant. Now we are repaying the loan. Given the fact that the value of dollar has increased greatly, the Group is paying more money to service the debt. The additional money that is being paid on the debt would have been channelled to a more productive usage,” he added.
Also, the Chief Executive officer, MOMAS Nigeria Limited, Mr. Kola Balogun said operators across the value chain are struggling to survive in the face of bad economy.

He said the woes of the operators have been compounded by the rise in the value of dollar in recent times, adding that companies are not recording growth because Nigeria runs an import-dependent economy.
He said many operators in the sector rely on accessories imported from abroad for production, stressing that they spend a lot of money on production when cost of importation is factored in.
Balogun asked: “Are we to talk of gas that its price is denominated in dollar? Are we to talk of pre-paid meters, sub-station equipment and other tools that are imported? Are we to talk of money spent on seeking partners abroad by power firms?”
Balogun, whose firm manufactures meters said indigenous meter producers are having problems despite the fact that they are sourcing 60 per cent of their materials locally.

Follow Us on Twitter!

Like Us on Facebook!

Do You Need a Sugar Mummy, Sugar Daddy, Girlfriend, Boyfriend Wife or Husband? If Yes, Then Click Here For Details



Download Video: 5 Shocking Sexual Traditions From Around The World (18+ Only)
Download Video: 5 Shocking Sexual Traditions From Around The World (18+ Only)
Download Video: Please if You are not up to 20 yrs Old, This Video is not for You…
Download Video: Please if You are not up to 20 yrs Old, This Video is not for You…
 Download VIDEO of 2 Les.bian Girls Caught Ma.king Love in Kogi State University Lesbian S E.x Ta.pe Scandal
Download VIDEO of 2 Les.bian Girls Caught Ma.king Love in Kogi State University Lesbian S E.x Ta.pe Scandal
 Video : See Why This Woman Was Abandoned By Her Fiance on their Wedding Day”
Video : See Why This Woman Was Abandoned By Her Fiance on their Wedding Day
Two Female Unilag Student Fought D!rty Str!pping Themselves Totally Nakked …[Watch Video]
Two Female Unilag Student Fought D!rty Str!pping Themselves Totally Nakked …[Watch Video]
Download Video: Secondary School Girl Allowed Her Classmates Have $ex With Her Inside Class
Download Video: Secondary School Girl Allowed Her Classmates Have $ex With Her Inside Class

0 comments:

Post a Comment

 
OmoVibes © 2016. All Rights Reserved.
Top