21 November 2014, Abuja – The Nigerian Government has signed agreements with power generation and distribution companies as well as independent power producers, international oil companies and the Nigerian Gas Company for the supply of gas to further boost the country’s power generation capacity which hit over 4,500 megawatts recently.
While speaking at the event which held on Tuesday November 18, 2014, the Minister of Power, Chinedu Nebo (Professor) said that the Ministry has developed an operator platform to ensure that transparency is maintained in the market. He added that NERC and the Ministry are working assiduously to ensure that all the conditions precedent to the declaration of the Transitional Electricity Market are fulfilled.
“The oil companies involved in the agreement signed in Abuja on Tuesday November 18, 2014 include: Agip, Oando, Pan Ocean, Chevron, Shell Petroleum Development Company (SPDC), Nigeria Petroleum Development Company, SEPLAT Petroleum and Total,” he stated.
“The Minister of Power and that of Petroleum Resources as well as the Group Managing Director of NNPC, the Governor of Central Bank of Nigeria (CBN) and the Chairman of the Nigerian Electricity Regulatory Commission signed on behalf of the Federal Government. The Federal Government on September 13, 2014 announced a N213 Billion Intervention Facility to offset gas legacy debts and address the revenue shortfall in the electricity market.”
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. According to him, the establishment of the Nigerian Electricity Sector Intervention Facility is being fuelled by the Central Bank of Nigeria and would be channeled through the Deposit Money Bank.
The Minister of Petroleum Resources, Diezani Alison-Madueke in her remarks inferred that the legacy gas debt of N36.9 billion owed to gas suppliers by the power sector is being settled by the CBN-led intervention scheme. Adding, with this intervention, all undisputed claims have been settled.
She informed 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, in order to create a viable and sustainable sector. The Minister indicated that the intervention was complemented by a reciprocal commitment by the gas suppliers to increase the volume delivered.
“The intervention by the gas companies would add 250 million cubic feet of gas per day to the grid which will cause power generation to improve. I believe that these interventions will in the near future, cumulatively bring 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).”