By Eze Okechukwu, Abuja

The Minister of Finance and Coordinating Minister for the Economy, Wale Edun yesterday declared that liquidity was the major hindrance required by the troubled power sector to achieve the desired result of producing steady Power in Nigeria.

This is as the Managing Director of Niger Delta Power Holding Company (NDPHC) Chiedu Ugbo informed the Senate Committee on Power in Abuja yesterday that the Calabar Power Generation Company under its ownership was the best performing power plant in the country.

In his submission to the Committee investigating the controversial Make up Gas (MUG) Reprocessing Deal Involving the Ministry of Finance, NDPHC, Calabar Generation Company Limited and ACUGAS Limited, the Minister of Finance pointed out that the need for liquidity into the Power Sector remained the key to unlocking it.

The Minister who made the submission through his Special Assistant, Mallam Dahiru Moyi said the agreements on Gas supply between NPDHC and ACUGAS Limited was inherited by former President Muhammadu Buhari in 2015, following after the agreement was signed in 2011 during President Goodluck Jonathan’s administration.

According to him, “just as the Ministry of Justice was not aware of the contract agreement, the Ministry of Finance was also not part of it from the beginning but since government is a continuum, the Ministry of Finance later came into it for the purpose of facilitating the required liquidity.

“The issues on ground about contracts agreements being investigated by the Senate Committee on Power is not about restructuring but providing the required liquidity which the Ministry of Finance is doing through collaboration with the Nigerian Liquified Natural Gas (NLNG).

 “Since NLNG pays Gas in Dollars, the Ministry is collaborating with it for a practical solution of bringing liquidity into the age long contract agreement through Deed of Transfer.

“Make Up Gas (MUG) belongs to Calabar, Calabar belongs to NDPHC and NDPHC belongs to Federal and State governments with the Federal Government having 52.68%”, he said.

In his own submission before the Committee, the Managing Director of NDPHC, Chiedu Ugbo said the company as a result of the Gas supply agreement with ACUGAS Limited was taking Gas from three out of five units and generating power from Calabar plant to the National Grid which according to him was the best power plant in the entire country.

He said NDPHC went out of its way to construct an 80 kilometres gas pipeline for utilization of MUG in Calabar and Alaoji power plants.

He however lamented that problems relating to systemic transition, frequency and voltage issues have not made the firm achieve the desired results.

In his remarks, the Chairman of the Committee, Senator Enyinnaya Abaribe (APGA, Abia South) thanked the stakeholders for giving the Committee clarity on the issue but added that it was still an ongoing investigation.

By Tony Obiechina, Abuja 

In a strategic move to address the identified gaps in the Electricity Distribution Companies (DisCos), the Federal Government has secured a $500 million loan from the World Bank.

In a statement by Head of Public Communications, Bureau of Public Enterprises ((BPE) Amina Tukur Othman on Thursday, approval for the facility was given by World Bank Board of Directors on February 4, 2021.

According to the statement, “this funding supports the Nigerian Distribution Sector 

Recovery Program (DISREP) aimed at improving the financial and technical 

performance of the DisCos”.

The Distribution Sector Recovery Program is designed to enhance the 

financial and technical operations of the DisCos through capital investment and 

the financing of key components of their Performance Improvement Plans (PIPs), 

which have been approved by the Nigerian Electricity Regulatory Commission 

(NERC).

 

Key areas of improvement include:

• Bulk procurement of customer/retail meters and meter data 

management systems.

• Implementation of a Data Aggregation Platform (DAP).

• Strengthening governance and transparency within the DisCos.

• Program Components

• The DISREP comprises two main components:

• Program for Results (PforR):

• Allocation: $345 million

• Purpose: Support the implementation of selected PIP components.

Others include 

• Implementation: Bureau of Public Enterprises (BPE)

• Investment Project Financing (IPF):

• Allocation: $155 million

The Purpose is to finance the procurement of meters, a Data Aggregation 

Platform, and Technical Assistance.

The DISREP loan, particularly the Investment Project Financing (IPF) component, is expected to significantly benefit the Nigerian Electricity Supply Industry (NESI) by:

• Closing the metering gap

• Reducing Aggregate Technical, Collection, and Commercial (ATC&C) 

losses

• Improving remittances and liquidity for the DisCos

• Enhancing the reliability of power supply

• Increasing transparency and accountability within the DisCos.

The $500 million DISREP loan from the World Bank offers concessional financing 

with more favorable terms than commercial bank loans. This will enable the DisCos to:

1. Invest in critical distribution infrastructure.

2. Improve ATC&C losses.

3. Increase power supply reliability.

4. Achieve financial sustainability in the power sector.

5. Enhance transparency and accountability.

The statement further explained that significant progress has been made in the preparation of the DISREP Program, with several key milestones achieved, and approval by the Federal Executive 

Council (FEC) on August 3, 2022. execution of the Financing Agreement by the 

Federal Ministry of Finance, Budget and National Planning, and the World Bank, 

adoption of the Program Operations Manual (POM) by BPE and TCN, obtained 

Legal Opinion from the Attorney-General of the Federation, Execution of the 

Subsidiary Loan Agreement, effective declaration of the DISREP Program on 

January 31, 2023, inauguration of the DISREP Technical Committee on May 6, 

2024, inclusion in the Federal Government Borrowing Plan, approved by the 

Senate Committee on May 16, 2024.

To ensure repayment assurance, the Bureau of Public Enterprises sought and 

obtained approval from the Nigerian Electricity Regulatory Commission (NERC) 

and the National Council on Privatisation (NCP) for a structured repayment 

hierarchy. 

The structure prioritizes payments including, Statutory Payments (Taxes), Repayment of CBN market loans, Market obligations , Repayment of DISREP loan and DisCos’ net revenue.

This structured repayment plan aims to mitigate risks associated with repayment 

uncertainty and defaults, with regulatory sanctions imposed for any defaults.

By Matthew Dadiya, Abuja

President Bola Tinubu has reassured investors in the energy sector of his administration’s resolve to further enhance the business environment and ensure investment convenience.

The President spoke Wednesday at the inauguration of three milestone projects, including the expanded AHL Gas Processing Plant; the ANOH Gas Processing Plant, and the 23.

3km ANOH – Obiafu-Obrikom-Oben (OB3) Custody Transfer Metering Station Gas Pipeline.

In a speech during the virtual inauguration of the projects at the State House, Tinubu also assured citizens that his administration is stepping up its coordination of other landmark projects and initiatives that will ensure the earliest realization of gas-fueled prosperity in the country.

 

The President, according to a statement by Special Adviser on Media and Publicity, Ajuri Ngelale, noted that the projects were fully in line with the Decade of Gas Initiative and his administration’s vision to grow value from the nation’s abundant gas assets, while concurrently eliminating gas flaring and accelerating industrialization. 

“This event is highly significant to our country as it demonstrates the administration’s concerted efforts to accelerate the development of critical gas infrastructure geared at significantly enhancing the supply of energy to boost industrial growth and create employment opportunities.

“It is pleasing that when these projects become fully operational, approximately 500MMscf of gas in aggregate will be supplied to the domestic market from these two gas processing plants, which represents over 25% incremental growth in gas supply. 

“In practical terms, this is more gas to the power sector, gas-based industries, and other critical segments of the economy. I, therefore, commend the strategic vision of the NNPC Limited and its partners, Sterling Oil Exploration & Energy Production Company Limited (SEEPCO) and Seplat Energy Plc, for this laudable and value-adding projects,” President Tinubu said.

The President said his government remains determined in its bid to leverage the nation’s vast gas capacity to drive economic growth. 

“Aside from the presidential CNG initiative which is aimed at moving the good people of Nigeria away from petrol and diesel as vehicular combustion fuel, significant progress has also been recorded in incentivizing gas development through Presidential Directives.

“The theme of this inauguration – ‘From Gas to Prosperity; Renewed Hope’, must be adopted by all gas-sector participants and would-be investors as a clarion call to ramp up efforts to accelerate investment and developments of projects in the gas sector on a win-win basis.

“I would once again commend the efforts of NNPC Ltd, alongside SEEPCO and Seplat Energy, on this business partnership initiative, and congratulate you all on the successful implementation of the three projects,” the President said.

President Tinubu also reiterated his government’s resolve to continue to provide support in deepening domestic gas utilization, increase national power generation capacity, revitalize industries, and create multiple job opportunities for economic growth.

“Today, I have the singular honour to inaugurate the expansion of the AHL Gas Processing Plant, the ANOH Gas Processing Plant, and the 23.3Km ANOH to Obiafu-Obrikom-Oben (OB3) Custody Transfer Metering Station Gas Pipeline Projects in line with my administration’s resolve to provide energy for Nigerians, and to use our vast natural gas resources to transform Nigeria,” the President stated.

May 15, 2024