Gencos, Government, Ministry of Power, NERC, TCN

TOWARDS BOOSTING POWER GENERATION, FG Signs Agreements with Market Participants

Posted: November 20, 2014 at 4:28 pm   /   by   /   comments (0)

The Federal Government has signed agreements with Generation and Distribution companies, Independent Power Producers, International Oil Companies, and the Nigeria Gas Company, for the supply of gas.

This is to further boost power generation which hit a historic high of over 4,500 MW recently in the country.

The oil companies involved in the agreement signed in Abuja on Tuesday (Nov 18, 2014) are Agip, Oando,  Pan Ocean, Chevron, Shell Petroleum Development Company (SPDC), Nigeria Petroleum Development Company, SEPLAT Petroleum, and Total.

Minister of Petroleum, Mrs D. Madueke

Minister of Petroleum, Mrs D. Madueke

The Minister of Power and that of Petroleum Resources, the Group Managing Director of NNPC, Governor of Central Bank of Nigeria (CBN), and Chairman of Nigeria Electricity Regulatory Commission, signed on behalf of the Federal Government.

The Federal Government, on Sept. 13, 2014, announced a N213 Billion  Intervention Facility to offset gas legacy debts and address the revenue shortfall in the electricity market.

Speaking at Tuesday’s event, the Minister of Power, Prof. Chinedu Nebo said the Ministry had developed an operator platform to ensure that transparency was maintained in the market.

Prof. Nebo said NERC and the Ministry were working assiduously to make sure that all the conditions precedent to the declaration of the Transitional Electricity Market were fulfilled.

The Minister said that the country had consistently generated between 4,000 and 4,500 for six weeks, for the first time.

Nebo noted that before and after the handover of the power sector to private investors, the market had accrued a lot of debts due to non-payment for gas and power supplied.

This, he explained, informed the establishment of the Nigerian Electricity Sector Intervention Facility being fuelled by the CBN, and would be channeled through the Deposit Money Bank.

The Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, said the legacy gas debt of N36.9 billion owed gas suppliers by the power sector was being settled by the CBN-led intervention scheme.

Minister of Power, Dr. C. Nebo

Minister of Power, Prof. C. Nebo

“With this intervention, all undisputed claims are hereby settled’’, she said.

She stated that in order to move the sector forward, appropriate security mechanisms would be put in place to ensure payment for the gas sold to the power sector to create a viable and sustainable sector.

The Minister said that the intervention was complemented by a reciprocal commitment by the gas suppliers to increase volume delivered.

She added that the intervention by the gas companies would add 250 million cubic feet per day of gas to the grid, which will cause power generation to improve.

“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 said.

The agreement will be followed by the disbursement of the intervention fund, monitoring of its implementation, and eventually, the declaration of the Transitional Electricity Market (TEM). 

Kande Daniel

Special Assistant, Media to the Hon. Minister of Power

Abuja. November 19, 2014

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