Nigeria approves $1.42bn rescue facility for power companies

Nigeria’s Minister of Petroleum Resources Diezani Alison-Madueke said the Nigerian government had granted N213 billion (about $1.42bn) to private electricity companies to boost electricity supply. Alison-Madueke told reporters on Friday in Abuja that the Central Bank of Nigeria (CBN) in collaboration with the commercial banks would provide a total facility of $1.42 billion to settle both the legacy gas debts as announced on August 2 and also the shortfall in revenues to the power sector.

 

The minister said that N36bn (about $240m) would be tied to commitments to supply specific volumes of gas-for-power and to negotiate and execute bankable gas supply agreements with power plants.

She said that the National Electricity Regulatory Commission (NERC) would publish a reset tariff order that will take into account the facility provided by the CBN, current levels of energy output, the new baseline gas price.

The minister said the electricity market, mainly consisting of private operators, would repay the facility with a first-line charge on their revenues over a 10-year period.

She also said that there would be a moratorium on repayment of the credit facility by the distribution companies until electricity supply improved across the country.