Funding and Incorporation
In August 2005, the National Council of State and the National Assembly approved an initial funding of US$2.5 billion for NIPP from the “Excess Crude Oil Account” (ECOA) which statutorily belongs to the Federal, state and local governments. The Federal Government therefore incorporated Niger Delta Power Holding Company Limited (NDPHC) as a limited liability company to serve as the legal vehicle to hold the NIPP assets using private sector-oriented best business practices.
Following the 2007 change in administration at the Federal level and in many states, the funding arrangements for NIPP were subjected to intensive legal, political and financial scrutiny, resulting in over two-year interruption in funding for the projects.
At the time of the suspension, US$2.8 billion was already invested in NIPP, including US$1.78 billion in funded letters of credits which allowed some of the projects to continue despite the funding interruption. Contracted commitments totaled US$7.385 billion.
Late in 2008, after a protracted and intensive debate on the way forward, the National Economic Council (NEC) agreed to set aside an additional US$5.375 billion from the ECOA as a Power Emergency Fund to complete NIPP subject to the approvals of all the state legislative houses.