NEPCO’s financial status difficult — IMF

NEPCO’s arrears amounted to JD100 million at the end of March

(File photo: Jordan News)
AMMAN — The International Monetary Fund (IMF) stated that the financial status for the National Electric Power Company (NEPCO) remains difficult in spite of the decrease in the losses predicted for 2022, indicating that the company’s arrears amounted to JD100 million at the end of March, Al-Mamlaka TV reported.اضافة اعلان

In the concluding fourth revision report which was issued on Monday, the IMF stated that the government has worked to contain the NEPCO losses to around 0.5 percent of the GDP in 2022, anticipating a 2.7 percent increase in consumption this year, due to the new, subsidized electricity tariffs paid by companies.

The fund expects that NEPCO’s long-term supply contracts for natural gas and relatively high renewable energy will protect the company from rising global fuel prices in the near term. It also expected NEPCO deficit to decrease to 0.3 percent of GDP in 2022, due to increased electricity consumption, and unexpected delays in the production of the Attarat oil shale project.

However, the balance of the NEPCO arrears amounted to JD100 million at the end of March, as financial requirements for the months of last December and March were not met, said the report, which predicted that NEPCO’s financial losses would rise to 0.7 percent of GDP in 2023, before declining to 0.4 percent in the medium term.

The IMF indicated that restoring NEPCO’s financial viability requires continuous reforms, as the roadmap for the financial sustainability of the electricity sector, which is being developed in consultation with international partners, will set measures to improve its operational balance.
NEPCO’s arrears amounted to JD100 million at the end of March
These measures include boosting revenue by introducing time-of-use tariffs, installing meters for all connected houses, and increasing exports to neighboring countries.

The fund added that “if global energy prices and the cost of electricity generation rise significantly above the baseline for workers, it will also be necessary to consider adjusting electricity tariffs toward cost recovery levels to protect NEPCO financing”.

Cost reduction measures include reducing LNG storage and regasification costs, improving electricity storage, and optimizing costs related to PPA commitments.

The fund stated that governance reforms, supported by the European Bank for Reconstruction and Development, will help enhance accountability as well as improve the operational efficiency of the NEPCO.

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