CBN pays additional N7bn for gas

CBN Governor, Mr. Godwin Emefiele

Today, the Central Bank of Nigeria disbursed a total sum of N6.9bn to five gas suppliers, one power generation company and one power distribution company.
This is the third in the series of disbursement made under the N213bn Nigerian Electricity Market Stabilisation Facility, brings the total amount given by the CBN, under the facility, to N64.62bn.
Out of the gas companies that benefitted from the N6.9bn, Chevron Nigeria Ltd received the highest amount of N2.04bn, followed by Shell Petroleum Development Company with N965m.
Other beneficiaries of the fund are Pan Ocean Ltd., which got N230m; Seplat, N739m; Nigerian Petroleum Development Company, N407m; Niger Delta Western, N852m.
Similarly, Ibom Power Generation Company received the sum of N1.7bn, while Eko Distribution Company got the sum of N4.4m.

Speaking during the disbursement of the fund in Abuja, the CBN Governor, Mr. Godwin Emefiele, told representatives of the gas firms that the amount represents debts by the power sector in proportion to the obligations to repay the facility by the five Discos that have so far signed up for the facility.
The discos are Eko, Ibadan, Kano, Port Harcourt and Enugu.
He said as more discos become confident that issues with their tariff regimes will be resolved and sign up to the facility, it is expected that further disbursements to gas suppliers and other power sector participants would be made.
He said the disbursement of the amount became imperative since the major reason for the low power generation by the generation companies was inadequate gas supply.
For instance, he said about 70 per cent of power plants in the country are fueled by gas, adding that findings by the bank had revealed that due to the absence of formal binding agreements between gas suppliers and power plants, significant debts to gas suppliers had built up.
These debts, he stated, stood at about N40bn as of the end of last year.
He said, “While we appreciate that for the gas suppliers, you see this as debts owed for products delivered, we say to you that for CBN and the banking sector, this is a loan with a clear development objectives.
“I trust that you will see this as a clear sign of the government’s commitment to change the course of both the domestic gas sector and power sector.
“By addressing the build up of debts along the power value chain, this facility will go a long way in boosting gas supply to the power sector, stabilising the electricity market.
“This is vital to bringing about more stable and affordable electricity supply to our homes and businesses.
In addition to recently signed gas agreement, the CBN boss urged the gas suppliers to complete the process of activating formal, binding agreements for gas volumes to power sector companies.