Palpable fear may have gripped stakeholders in the power sector value chain over the fate of the electricity Generating Companies (Gencos) should the N701 billion Payment Assurance Guarantee (PAG) programme end next year.
This was even as they lamented that an estimated 1,000 mega watts (MW) of Independent Power Plants (IPPs) capacity is presently idle due to a lack of gas.
In March 2017, the Federal Executive Council (FEC) approved a N701 PAG for Gencos to solve liquidity problems in the energy sector.
Under the PAG, the Central Bank of Nigeria (CBN) would hold N701 billion for regular payment for power generated onto the national grid after verification by the Nigerian Bulk Electricity Trader (NBET).
First to raise the alarm was the President, Nigeria Gas Association (NGA)- a chartered member of the International Gas Union, Mr. Dada Thomas, who lamented that finamce remained one of the biggest challenges in terms of gas policy. The intervention of NGA through a meeting with Minister of Power, Works and Housing in 2016 led to the N701 billion PAG proramme. What happens by January 2019 when this programme would have lapsed? He wondered. But, in order to ensure that a vacuum was not created in the power sector, Dada canvassed that the PAG programme should be extended.
Dada, while addressing the media on the forthcoming NGA bi-annual gas conference holding next month in Abuja with the theme ‘‘ Shift to Gas Economy: Pace and Scale of Innovation in the West Africa sub-Region’,’ said it would be a big shame if the Petroleum Industry Bill (PIB) would not be passed by the eight National Assembly.
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The NGA President said turning natural gas into a profit –making venture requires huge investments that address the five component areas of gas availability, affordability, deliverability, funding and the legal and regulatory framework.
‘‘Government and operators alike recognise that the first step is to provide a legal and regulatory framework that will enable the removal of all the other obstacles. As we all know, the passed gas policy proposes reforms so profound that almost every new investment is on hold awaiting the resolution of the questions raised by this legislation,’’ he said.
On the conference, he said it would provide the association with a veritable platform to gauge the current status and the way forward for this all important bill which has dragged the sector down for too long, adding that, Nigeria needs to develop all forms of energy to fuel its growth.
He disclosed that a major feature of the conference this year is to provide the needed platform to hear industry and other perspectives on ways to re-energize and maximize our natural gas potential as we shift to gas economy.
He maintained that, while the global debate about evolving business models for an evolving global gas business continues to grab the spotlight, closer to home, the discourse about the role of gas in Africa’s energy mix particularly Nigeria needs to continue.
‘‘With this in mind, we at NGA have continued to ask ourselves the questions on the current state of the natural gas industry in Nigeria in addition to evaluating the potential for its future development across the West African region,’’.