Banks To Offset N25bn PHCN Debt

In a more to enhance gas
availability and improve power supply, the Central Bank of Nigeria (CBN) is collaborating with other  Money Deposit Banks to offset the N25 billion debt which Power Holding Company of Nigeria (PHCN) owed gas companies.
The Managing Director, Ecobank Nigeria, Jubril Aku, made this known to newsmen, Thursday, at the Bankers Committee meeting held in Lagos.
The Ecobank MD, who explained that the banks would recover the fund from the Multi Year Tariff Order (MYTO) deduction, stated that the banks resolved to do so as to increase gas supply and boost power suppy.
Aku also said that the Bankers Committee is willing to support an initiative with the government where a special purpose vehicle (SPV) will be set up to provide loans to clear that debt and overtime, the loan would be recovered through MYTO tariff deduction.
The Ecobank boss noted that the essence of the power transformation is to achieve efficiency and ability to improve power supply which had been hindered by gas shortage.
He regretted that many of the operators have not raised their production capacity because of shortage of Gas. “One of the solution is gas pricing. There is an incentive now for the gas companies to produce gas. For the owners of the generating plants, there is also an incentive for them to improve generation”, he said.
Aku revealed that the gas companies have always insisted that the debt be paid, otherwise they would not produce and will began to accumulate new debts.
He said, the Minister of Petroleum, and the CBN governor met and announced the increase in the price of gas because they want gas to be commercially available to enable the gas company to produce more.
The price of gas was move from $1.50 to $2.50 plus a transportation of $0.8. Today at a price of $3.3 there are enough incentives for gas companies to produce gas.