AS a clear sign of Federal Government’s commitment to change the course of both the domestic gas and power sector, the Central Bank of Nigeria (CBN) yesterday signed a loan facility of N6.9 billion to gas and power suppliers in Abuja. The payment represent debts by the power sector in proportion to the obligations to repay the facility by the five Distribution Companies (DISCOS) of Eko, Ibadan. Kano, Port Harcourt and Enugu that have so far signed up to the facility.

A breakdown of the disbursement shows that Shell Petroleum Development Company received N965 million, Chevron N2.04 billion, Pan Ocean N230 million, Seplat N739 million, NPDC N407 million, and ND Western N852 million while Ibom Power received N1.7 billion respectively.

Signing the facility yesterday in Abuja, CBN Governor, Mr. Godwin Emefiele disclosed that it was the first time that the apex bank is able to make payment to the gas suppliers in the power sector with a view to revitalising Nigeria energy sector. “Last year, at one of our Bankers Committee retreats, where we focused on Gas to Power, we explored the issues in the gas to power value chain.

During these deliberations, it became clear to us at the Central Bank of Nigeria and the banking sector, that one of the reasons for the low power generation by the Generation Companies was inadequate gas supply and given the importance of gas to power sector we could not stand by and do nothing,” he stated.

He said that about 70 percent of power plants are fueled by gas, stressing that due to the absence of a formal direct and binding agreements between gas suppliers and power plants, significant debt to gas suppliers had built up from N25 billion to close to N40 billion as at December 2014.

“These debts or shortfalls were caused by the electricity tariff not reflecting the true cost of operating the recently privatised Generation and Distribution Companies in the power sector.”

Consequently, he said, “the gas sector has little or no incentive to make the necessary investments in gas exploration and infrastructure to keep up with the growth in power generation.”

According to him, “Today, we understand that over 2500MW of power that could be delivered to our businesses and homes is unutilised simply because there is no gas to fuel the existing power plants.”

To address this issue, the governor explained that the Nigerian Electricity Regulatory Commission approved a new benchmark price of $2.50/mcf for gas supply and $0.80/mcf as transportation costs for new capacity, a development, he described as commercially viable and good enough to encourage the existing and prospecting gas suppliers to ramp up their investments.

He noted that the CBN and the banking sector involvement is therefore predicated on tariffs, over the medium term, reflecting the true cost of doing business in the power sector.

Responding on behalf of Gas suppliers, the Director, NNPC/CNL Joint Venture, Mr. Supo Shadiya commended the CBN for the initiative and for bringing the historical moment to come to pass.

“Since we signed the MOU in November 2014, we’ve been waiting anxiously to see this day come to pass, I want to take this opportunity to emphasise that there is a very strong commitment on the part of the suppliers to our domestic market and indeed it is important for us to partner with the government to be able to achieve the vision, it has put in place over the years for the power sector.”

http://www.ngrguardiannews.com/2015/06/cbn-ease-gas-supply-with-n6-9bn-loan-facility/

Osinbajo talked about this during the campaign. Easing gas supply and making it profitable to attract investors. Now this is done. So automatically we're going to be generating more electricity due to implementation of this policy.

When a govt has the will to work, things start falling into place

This is a clear departure from our recent past when we didn't know what we were doing.

PMB administration is already demonstrating ability and readiness to solve identified problems.

Imagine that this type of loan incentive to make gas available to power plants could not be provided whereas billions of naira was looted through various scams.

PassingShot:
This is a clear departure from our recent past when we didn't know what we were doing.

PMB administration is already demonstrating ability and readiness to solve identified problems.

Imagine that this type of loan incentive to make gas available to power plants could not be provided whereas billions of naira was looted through various scams.

To be honest I think they knew what they were doing, the knew what to do but they didn't have the interest of the nation at heart. Like you said all they were interested in was running scams

These guys have been waiting for this since November, how come it took this long?? I thank God for this new government

mrmetoo1:


To be honest I think they knew what they were doing, the knew what to do but they didn't have the interest of the nation at heart. Like you said all they were interested in was running scams

These guys have been waiting for this since November, how come it took this long?? I thank God for this new government

Yes, they knew what was needed but refused to do it in the anticipation of a GEJ's win at the poll. Had he won the election, Nigeria would have continued with the downward slide to economic ruins of that wicked regime.

Lalasticlala Ishilove Obinoscopy, please do the needful.

There is usually a window period for MOUs to materialize, and here is one yet desperate turds are seeking to eulogize an admin that has been snailing so far.

The same ejits would have considered this a scam if after approval , the power situation remains comatose. Seeking to rob a man of his due won't do this APshit fanatics any good.

Rad1cal:
There is usually a window period for MOUs to materialize, and here is one yet desperate turds are seeking to eulogize an admin that has been snailing so far.

The same ejits would have considered this a scam if after approval , the power situation remains comatose. Seeking to rob a man of his due won't do this APshit fanatics any good.

Educate us on how long it takes MOUs to materialize. This has always been an excuse from you guys, everything takes time.. Everything!!

Then if you want to take credit for this, then take credit for everything bad that's going on right now because guys are quick to talk about the Boko Haram bombings as PMB's fault and even one of your leaders here said the high price of petrol at the pumps too were PMB's fault.

All I know is this was something Osinbajo said over and over again at his campaign stops and now it happened. Did you see the part the article said it was due to this government's commitment to gas supply and domestic power. Did you get the part they raised the price of gas to make it more attractive to investors?

Apart from all that, I'm sure this problem isn't new to us, this is something the past administrations could have tackled if they wanted to. PDP had 16 years to do this, wasn't done. The past admin had 5 years to do this, wasn't done now you want to take credit

Promise made, promise kept. Osinbajo said it and now it is materializing. Now GENCOs will generate more power without the usual excuse of 'no gas'.

So Nigeria will be great again.....even in my time. God I thank you o.

mrmetoo1:


[s]Educate us on how long it takes MOUs to materialize. This has always been an excuse from you guys, everything takes time.. Everything!!

Then if you want to take credit for this, then take credit for everything bad that's going on right now because guys are quick to talk about the Boko Haram bombings as PMB's fault and even one of your leaders here said the high price of petrol at the pumps too were PMB's fault.

All I know is this was something Osinbajo said over and over again at his campaign stops and now it happened. Did you see the part the article said it was due to this government's commitment to gas supply and domestic power. Did you get the part they raised the price of gas to make it more attractive to investors?

Apart from all that, I'm sure this problem isn't new to us, this is something the past administrations could have tackled if they wanted to. PDP had 16 years to do this, wasn't done. The past admin had 5 years to do this, wasn't done now you want to take credit[/s]

Please spare me the claptrap, non of what is happening now have to do with Osinbajo and co, as a matter of fact, what is happening today was set in motion months before the current admin .

http://coolfm.ng/lagos/news/national-updates/item/1689-cbn-banks-sign-mou-on-power-sector-intervention-fund

http://leadership.ng/business/390897/fg-signs-mou-9-oil-companies-supply-gas-power-generation


When something bad happens, it is as a result of GEJ cluelessness, when something good happens, it is change taken place at the mere whiff of PMB the Daura President.