The World Bank has provided its first Partial Risk Guarantee (PRG) for US$145mn to support Nigerias gas sector and bring more electricity to Nigerian consumers
The PRG agreement in support of a Gas Supply and Aggregation Agreement (GSAA) was signed recently between the World Bank and the Power Holding Company of Nigeria (PHCN), Egbin Power, Chevron Nigeria and Deutsche Bank.
As part of the 10-year GSAA, which is based on the industry template developed by Nigeria National Petroleum Corporation (NNPC), Chevron Nigeria will provide gas to Egbin power plant, thereby assuring gas availability and reliability for power generation and assisting in economic growth.
This is the first time that Egbin power plant will be able to procure gas under long-term arrangements.
The World Bank country director for Nigeria Marie Francoise Marie-Nelly said, “With more than 75 per cent of Nigeria’s power generation depending on natural gas, assuring the availability and reliability of gas supply is a critical step in realising the goal of un-interrupted electricity supply to Nigerian consumers.”
The World Bank PRG, provided under the Nigeria Electricity and Gas Improvement Project (NEGIP), will be key to enabling long-term gas supply arrangements.
The PRGs are used to cover private lenders against the risk of a public entity failing to perform its payment or contractual obligations.
