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FG, World Bank, others sign $500m power deal

FG, World Bank, others sign $500m power deal

The Federal Government has signed series of agreements with World Bank, Niger Delta Power Holding Company (NDPHC), and two other companies to invest about $500 million in the construction of gas processing facility in Akwa Ibom State.

The Vice President, Professor Yemi Osinbajo, at the signing ceremony said the agreements, which also includes Seven Energy, an integrated gas company in Nigeria, and Nigerian Bulk Electricity Trading (NBET), will enable the consistent additional generation of more than 500 MW of electricity to the national grid.

Power project

An agreement for a Partial Risk Guarantee (PRG) between NDPHC and the World Bank was signed to secure the supply of about 130 million cubic feet per day of gas to NIPP Calabar Plant by Seven Energy.

Also a Gas Supply Agreement was signed between NDPHC and Seven Energy with legal obligations on the gas supplier to deliver gas to the power plant in Calabar. The agreement is expected to come into force within 90 days.

Osinbajo says the development would open up new opportunities for investments in Nigeria’s gas and power sectors, noting that the arrangement was the first of its kind for gas supply in Nigeria and a demonstration of the Federal Government’s commitment to increasing power supply in the country.

According to the Vice President, “it will encourage investment in the gas infrastructure and we are certainly looking forward to the multiplier effects that will come from this.

“This is a very significant event for us and as we all know this is the first PRG for gas that we are signing. Given the current power situation, we expect that this gas that will go into the Calabar plant will provide about 500 MW of power which is very significant given our current situation.

“The gas pipeline itself is a feat of some sort, I am told that it traverses five rivers, so that by itself is worth celebrating. Even if all we get from social media this evening is an engineering feat, we will be quite pleased with that,” said the Vice President.

Osinbajo commended the World Bank and other partners for the confidence in the present administration especially in guaranteeing investment worth about 500 million dollars.

Signing for the FG at the event held at the Presidential Villa was the Minister of Finance, Mrs. Kemi Adeosun, while the World Bank was represented by its Country Director Rachid Benmessaoud.

On his part, the Managing Director of the Niger Delta Power Holding Company (NDPHC), Mr Chiedu Ugbo said the development was significant in the development of Nigeria’s gas and power program.

Expressing optimism that the guarantee would go a long way in addressing liquidity challenges experienced by the gas supplier for the Calabar Power Plant, the NDPHC MD said: “We have had gas supply issues in the Calabar plant. But now the gas supplier is supplying the gas molecules there and they just concluded a pipeline from their field in Akwa Ibom State to the Calabar power plant.”

Explaining the role of the World Bank, Ugbo said, the Bank would back NDPHC up to make the payment “in the event that we are unable to pay and as we have time, we pay back.”

Also commenting, Mr Philip Iheanacho, CEO of Seven Energy, stated that the signing of the agreement was very significant because the development would unlock almost $700 million of investment into gas infrastructure in Nigeria.

He added that “it is the first gas to power guarantee that the World Bank has provided for encouraging investment in the gas sector in Nigeria.”

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Journalist at Technology Times Media.

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email: success.kafoi@technologytimes.ng

Success Kafoi Journalist at Technology Times Media. Mobile: 08077671673 email: success.kafoi@technologytimes.ng