The Delta State House of Assembly has approved a request from Governor Sheriff Oborevwori to re-issue an ₦18.1 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 (IPP).
The governor told lawmakers that this move is essential to enable Access Bank’s partnership with the state government to manage the state’s composite Internally Generated Revenue (IGR) account, with the objective of improving efficiency and financial performance.
What the Guarantee Covers
Governor Oborevwori explained that under the Power Purchase Agreement (PPA) the state has two major obligations:
“The first is the issuance of an ₦18.1 billion Bank Guarantee to cover compensation payment and the buy-out amount in the agreement – renewable annually.”
“The second involves the issuance of a monthly Irrevocable Standing Payment Order of ₦430.7 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.”
The governor also noted that once the fresh guarantee is in place, the earlier one held by Sterling Bank will be cancelled to ensure a seamless transition.
Legislative Process
During Tuesday’s plenary session, the speaker, Dennis Guwor, read the governor’s letter requesting approval. A motion to approve was moved by the Leader of the House, Emeka Nwaobi, and seconded by the Deputy Speaker, Arthur Akpowowo. The assembly adopted the motion by voice vote, with unanimous support.
Why This Matters
The approval represents a critical milestone in advancing the Asaba IPP project, which is expected to significantly boost power supply in the state, enhance infrastructure reliability and support industrial growth.
Among other financial moves, Oborevwori highlighted that his administration has released over ₦36 billion in pension payments to retirees and is releasing ₦1.4 billion monthly for pension obligations since taking office.
By securing this ₦18.1 billion guarantee, Delta State signals strong fiscal backing for large-scale energy infrastructure. The move could boost investor confidence, increase local industrial productivity and enhance the state’s IGR base, potentially accelerating job creation and reducing costs associated with unreliable power supply.
