NBET is the government’s owned company which buys power from the GenCos.
The money, which will be made available by the Central Bank of Nigeria (CBN), is to guarantee the payment for the evacuation of power produced by Generating Companies (GenCos) to the national grid.
Minister of Power, Works and Housing, Babatunde Fashola who disclosed this yesterday in the Abuja said that the amount will be drawn on monthly basis in order to tackle liquidity challenges faced by GenCos.Briefing State House Correspondents after the Federal Executive Council (FEC) meeting presided over by Acting President Yemi Osinbajo, Fashola explained that part of the liquidity problem faced by GenCos is the inability to pay gas suppliers.
Flanked by the ministers of Information, Lai Mohammed and that of Agriculture, Audu Ogbe, Fashola explained that NBET would pay GenCos in arrears of electricity generated as a deliberate step to improve their confidence and that of intending investors into the sector.
“What we seek to achieve here is to bring some stability to the production side of the power value chain and also give confidence to investors who want to come in, who are concerned about how to recover their money.’’
According to the minister, the approval of council is to provide guarantee for NBET which is a 100 percent government owned company “to pay on a monthly basis its obligations for energy actually produced on to the grid to the GenCos that are its customers.”
He said power supply, which dropped to a little over 2000 megawatts, has increased to 4000 megawatts.
“It’s back now at over 4000 megawatts. We have solved the transmission problem in Ikot Ekpene largely to evacuate over a thousand. 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 to December 2018.’’
Fashola said he also briefed the cabinet on the Public-Private Partnership (PPP) status of the Second Niger Bridge and Lagos-Ibadan expressway.
The two Federal Government projects are uncompleted but the FEC resolved that the PPP arrangement will continue to be pursued.
Minister of Agriculture, Audu Ogbeh, said the FEC approved the sum of N263 million for three research institutions to produce gum arabic seedlings for Nigerian farmers and for export.
Gum Arabic is a major crop in the northern part of the country, stretching from Borno to Zamfara, adding that 17 of those states will grow the seedlings for export.
He said Nigeria earned $43 million from export of gum arabic last year, and that more will be earned with increased production, especially as the commodity is in high demand in other countries.
Ogbeh disclosed that similar efforts are on by the authorities to boost cassava production.