Gas supplies to the power sector may run into a hitch following advance notice by indigenous gas producers that the N701 billion Payment Assurance Guarantee by the federal government elapses by December this year.
The gas suppliers said the fund which was released by the Central Bank of Nigeria (CBN), to ameliorate liquidity crisis in the power sector, has not solved the issue of funding gap in the sector.
According to the gas suppliers, more than a year after the approval of the fund by the Federal Executive Council, FEC, the anticipated targets have not been met as electricity Generation Companies (GenCos) are still unable to pay their gas suppliers.
It is also believed that even if the whole sum had been released, it would still not be enough to offset the outstanding N800 billion required to settle the suppliers. FEC had, in March last year, approved N701billion as Payment Assurance Guarantee, to help GenCos meet gas payment obligations.
Giving insight as to the impending crisis, president of the Nigerian Gas Association (NGA) Engr. Dada Thomas, while briefing journalists yesterday in Lagos on the 2018, NGA, biannual International Gas Conference, said that about 1,000 megawatts (MW) of Independent Power Plants (IPP) capacity is presently being idle due to a lack of gas delivery.
Source: Leadership