An agreement has been signed between the government and power generation and distribution companies, oil firms, and the Nigeria Gas Company for the supply of gas to boost power generation now at 4,500 megawatts (mw)
The oil companies include Agip, Oando, Pan Ocean, Chevron, Shell, Nigeria Petroleum Development Company, SEPLAT, and Total.
Power Minister, Chinedu Nebo; signed on behalf of the government, along with Petroleum Resources Minister, Diezani Allison-Madueke, Nigerian National Petroleum Corporation Group Managing Director, Joseph Dawha; Central Bank of Nigeria Governor, Godwin Emefiele; and Nigeria Electricity Regulatory Commission Chairman, Sam Amadi.
The government had announced on September 13 a facility of N213 billion to offset legacy gas debts and address revenue shortfall in the electricity market.
Nebo said at the signing ceremony in Abuja that his ministry has developed a platform to ensure transparency, with plans for a Transitional Electricity Market.
According to him, the country has for the first time generated between 4,000mw and 4,500mw for six weeks running.
Before and after the handover of the power sector to private investors, he recounted, the market had accumulated huge debts because of non-payment for gas and power supply.
This, he added, informed the establishment of the Nigerian electricity sector intervention facility floated by the CBN, which will be channeled through banks.
Alison-Madueke explained that the CBN intervened to clear the legacy debt of N36.9 billion owed gas suppliers so that “all undisputed claims are settled.”
She promised appropriate security mechanisms to pay for gas in order to sustain stable power generation and supply.
Gas companies are expected to supply addition 250 million cubic feet per day to the grid.
“I believe that these interventions will cumulatively bring, in the near future, a permanent closure to the challenge of under-supply of gas in the domestic market,’’ she enthused.
The agreement will be followed by the disbursement of the fund, monitoring of implementation and, eventually, declaration of Transitional Electricity Market.
