Govt spends N500bn to settle power debts

31 December 2014, Abuja – The Federal Government spent about N500bn to settle liabilities and debts that threatened to truncate the power sector reform, Supervising Minister of Information, Dr. Nuruddeen Mohammed, has said.

Mohammed who said this at a press briefing on the nation’s economy in Abuja on Wednesday also disclosed that the government was in discussion to buy power from several organisations that generate more electricity than they need to run their businesses.

Power2Some of the forces that threatened to frustrate the reform in the power sector that had to be settled were workers of the defunct Power Holding Company of Nigeria that wanted their payoffs before the sale of the successor companies could continue.

The minister said, “The Federal Government expended close to N500 Billion to settle debts/payoffs, to allow progress in the power sector.

“The Federal Government through the Central Bank of Nigeria has provided a N213bn power sector intervention facility, to be disbursed to generation and distribution companies, as well as gas suppliers.

“The funds are intended to take care of legacy debts that had hampered the operations of the new players in the power industry. The CBN, the Nigerian Electricity Regulatory Commission and deposit money banks in the country have since signed a disbursement agreement in respect of the intervention fund.”

He added, “In order to get stranded power unto the grid, the Ministry of Power is coordinating negotiations with companies willing to generate power and export to the grid. These companies include: Ajaokuta Steel Company (85MW); ALSCON (100MW); Lafarge Cement (40MW); and Kaduna Refinery (33.5MW).

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  • Issi

    The power managers in Nigeria should stop piece meal approach to the power industry policy. Please come up with a comprehensive policy to lift this country up where it needed to be. Now you have just woken up to the idea of private companies generating excess that can be sold to the grid. Its about time. Good job. You don’t need a 200 megawatt plant to generate to the grid, homes, companies, industries who have excess can sell to the grid. Think about all those excess energy being wasted each day in this country form people generating more than they need. Oh, while you are still thinking of this don’t forget power storage technology, don’t wait too long to piece meal that.