The Delta State House of Assembly has approved Governor Sheriff Oborevwori’s request for the re-issuance of an N18.1 billion Bank Guarantee from Sterling Bank to Access Bank Plc in favour of Bastanchury Power Solutions Nigeria Limited, the developer of the Asaba Independent Power Plant.
The approval followed the reading of the governor’s letter during Tuesday’s plenary session by the Speaker, Rt. Hon. Dennis Guwor.
The governor explained that the re-issuance was necessary to facilitate Access Bank’s partnership with the Delta State Government in managing the state’s composite Internally Generated Revenue (IGR), aimed at improving efficiency and financial performance.
Governor Oborevwori noted that the existing IGR account is currently tied to a Bank Guarantee exceeding N18 billion, earlier issued by Sterling Bank on behalf of Bastanchury Power under the Asaba Independent Power Purchase Agreement (PPA).
He further outlined the state’s two key obligations under the PPA: “The first is the issuance of an N18.1 billion Bank Guarantee to cover compensation payment and the buy-out amount in the agreement – renewable annually,” the governor stated.
“The second involves the issuance of a monthly Irrevocable Standing Payment Order of N430.7 million, with a 2.5% annual increment in capacity charges. This payment covers capacity, operations, and maintenance costs for the power infrastructure, all to be drawn from the composite IGR account domiciled with Access Bank.”
Oborevwori also informed lawmakers that the State Executive Council had approved the arrangement for Access Bank to issue a fresh N18.1 billion Bank Guarantee in the same format as the existing one from Sterling Bank.
“Upon the issuance of the new guarantee, the one from Sterling Bank will be cancelled to ensure a seamless transition,” he added.
Following the presentation of the governor’s request, the Leader of the House, Hon. Emeka Nwaobi, moved a motion for its approval, which was seconded by the Deputy Speaker, Hon. Arthur Akpowowo. The motion was subsequently adopted unanimously through a voice vote.
The approval marks a key step in advancing the Asaba Independent Power Project, which is expected to boost energy supply and improve the state’s infrastructure and industrial growth.