The Federal Executive Council has approved a N701 billion guarantee for the Nigerian Bulk Electricity Trading (NBET) Plc yesterday. The guarantee was approved at a meeting with the council presided over by the acting President, Osibanjo in order to help improve NBET’s liquidity.
The money would serve as Power Assurance Guarantee for Nigeria Bulk Electricity Trading, NBET.
The Minister of Power, Works and Housing, Babatunde Fashola, after the FEC meeting, said that the Central Bank of Nigeria (CBN) will provide the guarantee.
Fashola disclosed that the liquidity problems in the market had affected NBET’s ability to deliver on its Public Private Partnership obligations to the GENCOs and the government is making effort to stabilise the generation part of the power value chain. This will, in turn, encourage profit oriented investors to invest in power generation in the country. He also noted that power generation had increased to 4,000 megawatts.
The minister stated: “So, going forward, in order to strengthen NBET, CBN is proving a payment assurance guarantee for any energy produced by any GENCO so that they can pay their gas suppliers when they get paid so that the hydros can continue to operate.
“As to the quantum of the guarantee, it’s for two years from January this year right through to December 2018. It’s capped at a maximum of N701bn, but it’s to be drawn monthly.”