Bureau of Public Enterprise (BPE), Mr Benjamin Dikki, last Tuesday said the bureau provided N50 billion to the new owners of the country’s power Generating Companies (GENCOS).
Dikki made this known at the signing of the Escrow Account Agreement on power between the bureau, the Nigeria Bulk Electricity Trading Company (NBET) and three commercial banks in Abuja.
According to him, the fund was to assist the investors to stabilise the power sector.
Dikki said the money would be in the Escrow Account as a trust fund held by another party to be given to a borrower to help the borrower carry out its obligations.
He said the Escrow Account would be held by First Bank, United Bank for Africa and First City Monument Bank as the lead escrow agent in the transaction.
Dikki said the banks would ensure that the agreed terms and conditions to access the funds were strictly adhered.
He listed some of the rules to include; confirmation from power market operators of the quantity of power a Genco supplies to the National Grid.
Dikki said the Escrow Account became necessary in order to guarantee the safety of any investments done by owners of these Gencos in generating the much needed power the country needs.
“We need to make sure that we create the atmosphere that will enable the Gencos to make investments in power generation without looking back or worrying if they can get back the money invested.
“We need to increase the capacity of power that we currently produce in the country because estimates show that we require a minimum of 40,000 mega watts for power to stabilise in the country.
“Right now, we have a deficit of about 29,000 mega watts, even though we have 6,000 coming from PHCN and NIPP, are going to bring in 5,000 mega watts.
Dikki said because of the high cost of power generation, it was more realistic for the government to encourage more private sector investment in power generation.
“We need to make sure that we create the atmosphere that will enable these Gencos owners to make investments in power generation without looking back or worrying if they can get back the money invested,’’ he said.
Dikki said Escrow Account was only open to generating companies and not the distribution companies due to the type of agreement made with the distribution companies at the point of sale.
“If you recall, the distribution companies were not given to the highest bidder, but rather to those committed to reduce to the nearest minimum the Average Technical and Commercial Losses incurred at the point of distribution by a certain percentage.’’