Plans to generate above 6,000 megawatts of electricity by December 2014 may have hit the rocks as the Federal Government on Saturday announced that its new target by the end of the year is now 5,000MW.
The Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, stated in Abuja on Saturday that the Central Bank of Nigeria would clear up the N25bn gas-related debts of the power sector in order to boost stakeholders’ confidence in the industry.
She said,
“Specifically, the CBN is looking at banking sector-led measures to pay off N25bn of debts owed to gas suppliers. This will be subject to reconciliation efforts and adequate provision for this support in a revised Multi Year Tariff Order that ensures repayment within five years.
“The CBN will also play a key role in financial arrangements that guarantee payment for gas supply by the power sector.”
“Similarly, electricity tariff across the country may rise as the government has approved a new benchmark price for gas to power plants. It is now $2.5 per million cubic feet and $0.8/mcf as transportation cost for new capacity from 2014.
The benchmark, it said, would rise with the United States of America’s inflation rate annually. Gas price to power firms, before the announcement on Saturday, was about $1.50/mcf.
These were disclosed by Alison-Madueke during a press conference on gas that was jointly held by the petroleum ministry, Ministry of Power, the CBN and the Nigerian Electricity Regulatory Commission.
She stated that about 750 million cubic feet per day of gas was currently supplied to the power sector and this resulted in an aggregate generating capacity of about 4,000MW.
She said, “It is expected that barring unforeseen developments, our interventions will add at least 370mmcf/d of gas and assure a generation capacity of at least 5,000MW within four to five months.”
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