FEC okays CBN intervention for GenCos, N4b for FCT projects

Electricity substation

DisCos require $10 billion investment to improve power supply, says AFD
The Federal Executive Council (FEC) has approved the extension of a funding facility by the Central Bank of Nigeria (CBN) for the nation’s electricity Generation Companies (GenCos).

Minister of Finance, Zainab Ahmed, while addressing State House Correspondents after the FEC meeting at the Presidential Villa presided by Vice President Yemi Osinbajo yesterday, said the Council approved “an extension of a CBN intervention that will be used to continue to support the power sector, specifically the generation arm of the sector.”

“This is based on a commitment that we signed into as a country, where we have several guarantees to the Generation Companies (GenCos) to bridge any gap that they have after the Nigerian Bulk Electricity Trading Plc (NBET) has settled them.”

“So, it is a cost on government, it is a loan, government will be paying it back to the CBN. The essence is to meet the contract obligations that the government signed with the GenCos on the assurance we gave them on off-taking any power that they generate after payment is made from the NBET,” she said.

The minister also disclosed that FEC approved a new import levy for sustainable financing of Nigeria’s membership subscription in the African Union (AU).

Besides, the FEC has approved N4.03 billion for the development of various infrastructural projects within the Federal Capital Territory (FCT) in Abuja.

The FCT minister, Mohammed Bello, said he presented nine memoranda expected to facilitate the provision of infrastructure in the city.

Meanwhile, a group, French Agency for Development (AFD), has said that nothing less than $10 billion is required in the next five years to offset investment shortfall in the 11 electricity Distribution Companies (DisCos) in the country.

At a conference organised by the agency on challenges in the power sector where a compendium report of the issues affecting the Discos was presented, the AFD said: “The 11 DisCos operating in Nigeria would need more than $10 billion in five years, innovative financing solutions must be devised and possibly involving new players.”

The group stated that in-depth study, carried out by a consultancy firm, AF Mercados, under the technical assistance programme, was conducted with the support of the European Union (EU) to propel the design of a way forward for the sector.

Team Leader of Capacity Building and Technical Assistance Programme (CaBTAP), AF Mercados, Jose Guerra, said the study equally aimed at empowering decision-makers to make the right decisions in the Nigerian power sector with reliable information.

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CBNGENCOsNBETYemi Osinbajo
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