By Dipo Olowookere
Earlier this year, Minister of Power, Works and Housing, Mr Babatunde Fashola, announced the approval of N701 billion by the Federal Executive Council (FEC) as bailout to the power sector, especially for the power generation subsector.
He had explained that the N701 billion was like a payment assurance fund to be given to electricity generating companies fondly called GenCos in the country for energy delivered on a monthly basis for two years, beginning from January, 2017.
Mr Fashola had further explained that the money would be disbursed by the Nigerian Bulk Electricity Trader (NBET) to the GenCos.
Head of Corporate Communications of NBET, Henrietta Ighomroro, has exclusively informed Leadership newspaper that about 10 GenCos have so far received N12 billion from the N710 billion intervention fund.
She listed those paid as Kainji, Jebba, Shiroro, Geregu, Olorunshogo, Omotosho, Shell Afam, Opai Agip and Omoku.
“The N701 billion intervention of the federal government is a loan to NBET to, in the short term, enable it meet its payment obligations to the GenCos for power certified delivered on a monthly basis so they can have enough revenue to pay gas suppliers and run their operational and overhead costs, and it is meant to run for two years, beginning from January,” the spokeswoman told Leadership newspaper in an interview.
According to her, the intervention only provides additional fund to enable the GenCos meet their obligations.
She said scheme is for GenCos that have the contractual pact known as Power Purchase Agreement (PPA) with NBET.
“We have 22 of them that are into the agreement with us, and you can be entitled after all the requisite documentations with a guarantee that you have delivered an amount of power, not just because you are a generating company,” she said.
Under the arrangement, the Payment Assurance is to guarantee payment of 80 percent of the GenCos’ invoice, while 90 percent of that percentage is earmarked for direct payment to the gas suppliers by NBET in offsetting the GenCos bill, leaving the remaining 10 percent for the GenCos in addition to the payment received from the distribution companies (DisCos) to run their businesses.
Ighomroro added that the distribution companies were able to pay about 33 percent of their invoice to NBET for the month of January, which NBET has also paid the GenCos, apart from the one accruing to them from the Payment Assurance Scheme.
Adedapo Adesanya