NDPHC MD: We’ve intensified debt recovery, secured off-takers for stranded energy

The Niger Delta Power Holding Company (NDPHC) says there has been intense efforts on debt recovery from bilateral customers.

Jennifer Adighije, managing director (MD) of NDPHC, spoke on Friday in Abuja.

Adighije said the power sector is burdened by cash flow challenges, which ripple across the ecosystem, affecting power generation, transmission, and distribution companies.

However, the MD said the debt recovery has allowed the company to address its obligations to gas suppliers, who account for a significant amount of the cost of power generation.

“It’s important to know that the sector is characterised by cash issues across all the subsectors you know and across the entire ecosystem and it reverberates,” she said.

“So the DisCos are claiming to be owed heavily which is why the bulk electricity trader does not settle 100 percent of our invoices so the bulk trader settles about 30 to 35 percent on our invoices and you must also bear in mind that 65 to 70 percent of our cost of generation goes to gas supply so in turn we also owe our gas suppliers.

“So by improving our liquidity we’re able to address some of our debts, some of the exposure that we have to our gas supplies and we’re able to settle some of our gas to meet our gas obligations to a large extent.”

Adighije also said the long-standing issue of stranded energy due to excess generation capacity relative to demand, is being addressed. 

According to the NDPHC boss, the company has adopted a strategy to address surplus energy.

The government-owned firm, in alignment with the July 25 directive from the Nigerian Electricity Regulatory Commission (NERC), which encourages direct energy sales to eligible customers, said it has allocated its stranded power capacity to bilateral and eligible customers.

OFF-TAKERS EXPECTED TO SIGN POWER PURCHASE AGREEMENTS BY 2025

Adighije said off-takers who have submitted expressions of interest (EOIs) for the stranded energy of the project will finalise their power purchase agreements (PPAs) by 2025.

She also said some off-takers have expressed interest in acquiring up to 100 megawatts (MW) of capacity each.

“We have always had a generation capacity in excess of demand and the demand is coming from the downstream markets,” she said.

“So, we must understand that the market is driven by demand which has created a lot of stranded energy for us because we have energy generated in excess of demand.

“But with this new management our strategic would unlock that stranded energy by dedicating significant portions of that energy now to eligible customers and bilateral trading arrangements pursuant to the order July 25th order of the NERC directing us now to trade bilaterally with eligible customers so that should be able to address our stranded capacity.

“We already have a lot of off-takers that have sent expressions of interest like Zenith Point is supposed to off-take about 100 megawatts. We have auctioned about 100 megawatts, as well as several other potential PPAs that we are likely to sign in 2025.

“So that would address to a large extent our stranded capacity challenge talking about 2025.”

Adighije said efforts are being made through collaboration to unbundle the bottlenecks that are being faced in the sector, especially in the area of liquidity challenges “as the president has already promised to come up with some initiatives that will improve our outlook for 2025”.