Bailout: FEC Approves N701bn for Electricity Firms over Poor Power Supply

The Federal Executive Council (FEC) has en­dorsed a N701 bil­lion deal as Power Assurance Guarantee to enable the Ni­geria Bulk Electricity Traders Plc (NBET) buy off generated electricity from the Generating Companies (GENCOs).
The Minister of Pow­er, Works and Housing, Ba­batunde Fashola (SAN), dis­closed this to newsmen after the FEC meeting chaired by Acting President Yemi Osin­bajo at the State House, Abuja.

Fashola explained that the money will be made available by the Central Bank of Nigeria (CBN) and it will address the complaints by GENCOs that not all the electricity they gen­erate is bought and evacuated to the national grid.
The GENCOs have con­sequently been facing liquid­ity problems and being una­ble to pay their gas suppliers. The CBN facility will be drawn on monthly basis to solve this problem.
According to Fashola, NBET will pay GENCOs in arrears of electricity generated as a deliberate step to improve their confidence and that of in­tending investors in the pow­er sector.
He explained that “a few weeks ago, you were report­ing that power supply had dropped to a little over 2,000 megawatts. It is back now at over 4,000mw.
“We have solved the trans­mission problem in Ikot Ek­pene largely to evacuate over 1,000 megawatts, but the gas suppliers were being owed so they were not supplying gas for the power producers.
“As to the quantum of the guarantee, it is for two years from January this year right through to December 2018.
“It is capped at a maximum of N701 billion but it is to be drawn monthly. It is possible it may not reach that but we have projected on the total cost that NBET will likely pay,” he said.