Babatunde Fashola, minister of power, works and housing, says the N701bn payment assurance guarantee fund for electricity generation companies (GenCos) has raised power generation capacity to 7,000 megawatts (MW).
The minister disclosed this on Monday at the 29th monthly power sector meeting hosted by Mainstream Energy Solutions Limited (MESL) in Minna, Niger state.
Fashola said the payment which started in 2017 had raised GenCos’ monthly payment to 80 percent from 20 percent, which has also significantly increased their revenue.
The GenCos have been battling with losses from the inability of distribution companies (DisCos) to pay the monthly invoices for the energy delivered to them, hence the creation of the fund to enable GenCos meet up with gas payment to stabilise power generation.
“This was not in any law. It was a creation of the Buhari government to give comfort to investors in the generation side of the value chain that they will be paid for supplying power.
“Since its implementation in 2017, recovery of payments by GenCos has increased from 20 percent to 80 percent, and power supply capacity has improved from 4,000MW to 7,000MW and there is an appetite by other players to participate.
“We must harmonise the price of gas for payment under the scheme, where there are differential prices arising from different gas suppliers.”
Fashola added that the DisCos remain the weakest in the power sector value chain.