The Federal Government has on Monday approved the extension of the Central Bank of Nigeria (CBN) intervention fund for the nation’s electricity Generation Companies (GenCos).
The Minister of Finance, Zainab Ahmed, disclosed this while addressing State House correspondents after the FEC council meeting presided over by Vice President Yemi Osinbajo in Abuja on Monday. She said that 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.”
She also added “the central bank facility that we got approval for today is to pay the gencos for any financing shortfall that they have after the bulk trader NBET settles them. So it is a cost on government, it is a loan, the government will be paying it back to the central bank. 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.”