The introduction of the N701.9 billion Payment Assurance Facility (PAF) to raise Generation Companies’ (GenCos) monthly revenue by 80 percent has raised generation capacity to 7,009 megawatts (MW) in the past 18 months, records have shown.
According to an official update obtained from the Nigerian Bulk Electricity Trading (NBET), the fund was borrowed by the agency as an intervention in the electricity market due to poor performance by the 11 DisCos. As the systems settlement administrator for NESI, NBET manages and implements the N701.9bn PAF to the GenCos.
The funding was initiated by the Minister of Power, Works and Housing, Mr. Babatunde Fashola, in April 2017, to pay at least 50 percent of the GenCos’ invoices in addition to the average of 20 percent the DisCos were remitting monthly to guarantee adequate electricity generation.
The fund was to cover settlement from January 2017, up to 2019, when it is expected that through the Power Sector Recovery Programme (PSRP), the electricity market would have become buoyant and the DisCos would have improved significantly on their remittances for energy supplied.
NBET which stated the impact of the funding to the GenCos since January 2017, said it had demonstrated all the timeliness and efficiency that could be achieved in settlement administration in the NESI. The regular funding, according to NBET’s data, had increased and sustained electricity generation onto the national power grid.
Source: Daily Trust