NERC queries W’Bank’s $112m guarantee on GSA for Calabar plant

NERC
NERC

The Nigerian Electricity Regulatory Commission (NERC) has written to the Vice President, Prof. Yemi Osinbajo, to express its worries about the Gas Sales Agreement (GSA) the Niger Delta Power Holding Company (NDPHC) signed with a private gas firm, Accugas Limited for the supply of gas to its 562 megawatts (MW) Calabar power plant, and which the World Bank guaranteed.

Documents obtained in Abuja indicated that the NERC initiated an investigation into the GSA between Calabar power and Accugas – a subsidiary of Seven Energy, from which it raised its worries on the likely impact of the World Bank’s $112 million guarantees for the GSA, on Nigeria’s electricity market.

It was gathered that NERC’s investigation involved a public hearing with key stakeholders in the sector except for the World Bank which allegedly ignored the public hearing and that NDPHC’s ‘take or pay’ GSA with Accugas was consummated regardless of NDPHC’s very difficult financial position which the World Bank originally raised and said was the reason it would not guarantee the GSA.