The Federal Government and the World Bank have signed a Partial Risk Guarantee (PRG) agreement for the supply of gas to the $500 million Calabar gas plant to boost energy supply by 500 megawatts.
Vice President Yemi Osinbajo, who witnessed the signing at the Presidential Villa, said the event is very significant for Nigeria as it would encourage investment in gas infrastructure.
Osibanjo said government expected that going by the current power situation, the investment was worth celebrating. He said the government was grateful to the World Bank and the investors in the Calabar plant for coming to the aid of Nigeria in its drive to increase power supply.
He said: “We are looking forward to the multiplier effect that will come from this investment,” Osinbajo said noting that the gas plant traversed Rivers, Cross River and the Akwa Ibom States. The Vice President also said the investment would portend greater things that could happen in the future, the Vice President said.”
The Managing Director, Niger Delta Power Holding Company (NDPHC) Ltd., Mr Chiedu Ugbo said the agreement was to tackle the gas supply issues in the plant built to generate about 561 megawatts of electricity.
He said the agreement was to enable the gas supplier to supply approximately 131 million cubic feet of gas per day to the Calabar plant, from its field in Akwa Ibom.
He said it was the first PRG agreement for the security payment for the supply of gas to cushion the breach in payment for the supply of gas.
According to him, the Calabar Generation Company is owned by the NDPHC, adding that in the event of a breach, JP Morgan under the World Bank would pay and be reimbursed gradually in 12 months.
The Chief Executive of the Seven Energy, Mr Philip Iheanacho, also speaking at the event said this was the first gas-to-power guarantee that the World Bank had provided for encouraging investment in the gas sector in Nigeria.
He said it had unlocked about $700 million investment into gas infrastructure in the country.
He said: “Seven Energy has committed its shareholders together with its banks for very significant investment on the back of this guarantee from the World Bank. It is a means of attracting capital into the gas sector, which is critical to the power sector in Nigeria,” he said.