Power supply, which stands at 4,000 megawatts, is set for a major boost.
The Federal Executive Council (FEC) yesterday approved N701 billion Power Assurance Guarantee for the Nigeria Bulk Electricity Trading (NBET)—to ensure a better supply of gas to the power plants. This will in turn improve power supply.
One of the major problems of the sector has been the lack of gas for power plants and the complaints about access to funding by the Generating Companies.
Minister of Power, Works and Housing Babatunde Fashola announced the FEC approval after yesterday’s meeting chaired by Acting President Yemi Osinbajo.
With him at the briefing were Minister of Information Lai Mohammed and Minister of Agriculture Audu Ogbeh.
Fashola said the Central Bank of Nigeria (CBN) facility will guarantee payment for the evacuation of power produced by Generating Companies (GenCos) for the national grid.
It will be drawn monthly to tackle the GenCos liquidity challenges.
NBET will pay GenCos, which have been unable to pay their gas suppliers, in arrears of electricity generated as a deliberate step to boost their confidence and that of intending investors in the sector.
Fashola said: “You will recall that a few weeks back we announced the approval of council for early works for the second Niger Bridge. That bridge at some time was part of a PPP initiative. You will also recall that at the same time, some private agreements were signed to build the Lagos-Ibadan express way.
“The first memo is to brief council on the PPP status of those infrastructure projects and present options to government, which was essentially that where those PPPs are having problems, government must lead and finance the infrastructure while continuing to engage the private sector. Government remains committed to having private participation in infrastructure renewal.
“But government, as a matter of strategy; thinks that it can continue until financial closures, agreements and all of that are put in place when PPPs become ready and viable to help deliver. So, it was a strategy memorandum, the conclusion essentially which is that government is committed to doing short financing as much as possible and encouraging PPP as much as possible.