• Tuesday, June 25, 2024
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Liquidity, not restructuring needed to fix power sector – Edun

FG unveils central revenue system to boost accountability

Wale Edun, the minister of finance and coordinating Minister for the economy, emphasised on Monday that liquidity, rather than restructuring, is the critical solution required to address the issues plaguing Nigeria’s power sector.

Edun made this submission during a committee investigation into the controversial Make-up Gas (MUG) Reprocessing Deal at the Senate. This deal involves the Ministry of Finance, Niger Delta Power Holding Company (NDPHC), Calabar Generation Company Limited, and ACUGAS Limited.

“It is not about restructuring but providing the required liquidity, which the Ministry of Finance is doing through collaboration with the Nigerian Liquefied Natural Gas (NLNG),” Edun stated through his Special Assistant, Dahiru Moyi.

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He explained that the gas supply agreements between NPDHC and ACUGAS Limited were inherited by former President Muhammadu Buhari in 2015, having been signed in 2011 during President Goodluck Jonathan’s administration.

“Just as the Ministry of Justice was not aware of the contract agreement, the Ministry of Finance was also not part of it from the beginning. But since government is a continuum, the Ministry of Finance later became involved to facilitate the required liquidity”, he stated

Edun highlighted that since NLNG pays for gas in dollars, the Ministry is collaborating with it to bring liquidity into the longstanding contract agreement through a Deed of Transfer.

“Make-up Gas (MUG) belongs to Calabar, Calabar belongs to NDPHC, and NDPHC belongs to the federal and state governments, with the Federal Government holding 52.68%,” he explained.

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Chiedu Ugbo, Managing Director of NDPHC, also spoke to the committee, stating that due to the gas supply agreement with ACUGAS Limited, the company is utilizing gas from three out of five units to generate power from the Calabar plant for the National Grid. He noted that this plant is the best in the country.

Ugbo detailed that NDPHC had constructed an 80-kilometer gas pipeline for the utilization of MUG in Calabar and Alaoji power plants. However, he lamented that systemic issues related to transition, frequency, and voltage have prevented the firm from achieving the desired results.

Enyinnaya Abaribe, Chairman of the Committee, thanked the stakeholders for providing clarity on the issue but noted that the investigation is still ongoing.