Wale Edun, the Minister of Finance and Coordinating Minister for the Economy, has emphasized the urgent need for increased liquidity in Nigeria’s power sector.
This call was made during a Senate Committee on Power investigation into the controversial Make-Up Gas (MUG) Reprocessing Deal, involving the Ministry of Finance, Niger Delta Power Holding Company (NDPHC), Calabar Generation Company Limited, and ACUGAS Limited.
The minister, represented by his special assistant Dahiru Moyi, clarified that the current gas supply agreements between NDPHC and ACUGAS Limited were inherited by former President Muhammadu Buhari in 2015, having been initially signed in 2011 under President Goodluck Jonathan’s administration.
He noted, “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 came into it for the purpose of facilitating the required liquidity.”
Moyi further explained that the ongoing issues with the contract agreements are not about restructuring but about providing the necessary liquidity.
He stated, “The Ministry of Finance is collaborating with the Nigerian Liquefied Natural Gas (NLNG) for a practical solution to bring liquidity into the long-standing contract agreement through a Deed of Transfer.
Since NLNG pays for gas in dollars, this collaboration aims to ensure the necessary funds are available. 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 a 52.68% stake.”
Chiedu Ugbo, Managing Director of NDPHC, informed the Senate Committee that the Calabar Power Generation Company, owned by NDPHC, is currently the best-performing power plant in the country.
He attributed this performance to the gas supply agreement with ACUGAS Limited, which allows the company to utilize three out of five units for power generation, supplying electricity to the National Grid.
He also mentioned the construction of an 80-kilometer gas pipeline to facilitate gas utilization at the Calabar and Alaoji power plants. However, Ugbo lamented that issues related to systemic transition, frequency, and voltage have hindered the achievement of optimal results.
Senator Enyinnaya Abaribe (APGA Abia South), Chairman of the Senate Committee, expressed gratitude to the stakeholders for providing clarity on the issue. He noted, however, that the investigation is still ongoing.
