According to the Central Bank of Nigeria data, the debt owed to Nigerian banks by operators in the power sector rose by 12.83 per cent in one year to N861.14bn in December 2021.
This is coming amidst the lingering problems plaguing the sector since it was privatized over eight years ago.
According to figures obtained from the CBN, Power generation firms and independent power producers increased their total debt to N522.2bn in December 2021 from N443.37bn in December 2020.
Transmission and distribution firms owned banks N338.94bn as of December 2021, up from N319.85bn a year earlier.
Recall that in July 2020 that the core investors in the distribution companies were looking to restructure the loans advanced to them by banks for the acquisition of the power assets. Alos, in November 2013, the nation’s distribution and generation companies were privatized through the Bureau of Public Enterprises, fetching about $3.2bn for the Federal Government, as the Discos and Gencos were sold for $1.7bn and $1.5bn, respectively.
The Federal Government officially privatized the six successor power generation companies and 11 distribution firms that were unbundled from the defunct Power Holding Company of Nigeria.
The acquisitions by the core investors were financed mostly by debts, a significant portion of which was provided by local banks.