FG, World Bank sign PRG pact for $500m Calabar gas plant
Posted By: Tola Akinmutimion
e World Bank yesterday signed a Partial Risk Guarantee (PRG) agreement for the supply of gas to the $500 million Calabar gas plant.
The deal is expected to boost power supply to the national grid by 500 megawatts. Minister of Finance, Mrs.Kemi Adeosun and the Managing Director, Niger Delta Power Holding Company (NDPHC) Ltd, Mr. Chiedu Ugbo, signed for the Nigerian government while Rachid Benmessaoud, World Bank Country Director and Chief Executive of the Seven Energy, Mr Philip Iheanacho, signed for World Bank.
The Vice President, Prof. Yemi Osinbajo, who witnessed the signing of the agreement at the Presidential Villa, said the event was significant for the country as it would encourage investment in gas infrastructure.
He explained that government expected that going by the current power situation, the investment was worth celebrating even as he commended World Bank and the investors for their commitment to government’s plan the to improve power supply nationwide.
- “We are looking forward to the multiplier effect that will come from this investment,’’
Osinbajo said. In his remarks, the Managing Director, Niger Delta Power Holding Company (NDPHC) Ltd., Mr Chiedu Ugbo, said the agreement was to tackle the gas supply problems in the plant which has the capacity to generate about 561 megawatts of electricity.
The industry expert explained further that the agreement was to enable the gas supplier to supply approximately 131 million standard cubic feet, scf, of gas per day to the Calabar plant from its field in Akwa Ibom. According to him, the Calabar Generation Company is owned by the NDPHC, concern of government, adding that in the event of breach, JP Morgan under the World Bank would pay and be reimbursed gradually in 12 months.
The Chief Executive of the Seven Energy, Mr Philip Iheanacho, said that the deal was the first gas-to-power guarantee that the World Bank had provided for encouraging investment in the gas sector with the potential of unlocking about $700 million investment into gas infrastructure in the country.
- “Seven Energy has committed its shareholders together with its banks for very significant investment on the back of this guarantee from the World Bank. It is a means of attracting capital into the gas sector, which is critical to the power sector in Nigeria.’’
Iheanacho noted that the World Bank had a programme of gasto- power guarantees that could be used for further investments in the sector, lamenting however that the biggets challenge for investors in the gas sector was their worry about payment risks.