The federal executive council (FEC) on Wednesday approved the sum of N701 billion to enhance the evacuation and distribution of electricity across the country.
Speaking with journalists after FEC meeting presided over by Acting President Yemi Osinbajo, Babatunde Fashola, minister of power, works and housing, explained that lack of funds made it impossible for Nigeria Bulk Electricity Trading (NBET) to buy and distribute power produced by Generating Companies (GenCos).
Fashola said government was trying to achieve stability on the power production side and the would give confidence to investors who want to come into the sector.
“The liquidity problems that have characterised the market have affected NBET’s ability to deliver on its public private partnership (PPP) obligations through the GENCOS. So, going forward in order to strengthen NBET, CBN is proving a payment assurance guarantee for any energy produced by any GENCOS, so that the GENCOS can pay their gas suppliers when they get paid. So that the hydros can continue to operate,” the minister said.
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“What we seek to achieve here is to bring some stability to the production side of the power value chain and also give confidence to investors who want to come in, who are concerned about how to recover their money, payment assurance and also people who are planning to invest in the gas sector which is being championed by the ministry of petroleum, they also are saying the same thing in terms of payment for gas produced.
“So, the approval of council was to provide this guarantee for NBET which is a 100 percent government owned company to pay on a monthly basis its obligations for energy actually produced on to the grid to the GENCOS that are its customers.”
He said over a thousand mega watts could be evacuated from Ikot Ekpene but the gas suppliers were being owed and have cut off their supply to the power producers.
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