The Nation Newspaper

Tag: NBET

  • DisCos seek probe of NBET, GenCos for alleged fraud

    • Illiquidity in power sector hits N1trillion

    The Association of Nigerian Electricity Distributors (ANED) called on the Federal Government to probe the Nigerian Bulk Electricity Trading (NBET) Plc over inflation of invoices to Electricity Generation Companies (GenCos).

    Its Director of Research and Advocacy, Mr Sunday Oduntan at a briefing in Abuja, said NBET and power generators  have to open their books for scrutiny.

    He called for immediate intervention in the power sector to make it more sustainable, stressing that the process for raising monthly energy invoices be made transparent.

    “The GenCos (are) inflating invoices especially on capacity charges. I just heard  about this for the first time last week although, over time we have been wondering that perhaps there is a magic somewhere or that some magicians were doing magic somewhere under the table.

    ANED urged the Federal Government to compel a transparent audit of market accounts noting that  DisCos can’t continue to pay for GenCos’ investments when such costs cannot be passed to electricity customers.

    “If there is any kind of fraud, then it is time to address it. We have invoices to show for it and if we haven’t confirmed it, we won’t be talking about it.

     

  • AEDC to distribute more power with new transmission station

    AEDC to distribute more power with new transmission station

    With the commissioning of the Kukuaba Transmission Station, the Abuja Electricity Distribution Company (AEDC) on Monday said that it is now reinforced and better positioned to serve its customers better.

    Speaking at the ceremony in Abuja, where the Minister of Power, Works and Housing, Babatunde Fashola, who was represented by the Permanent Secretary, Engr. Louis Edozien, the Managing Director of AEDC, Engr. Ernest Mupwaya explained that the company can now distribute power directly to Lugbe and its environs.

    This, according to him, is because the line from which the consumers are now getting their power is nearby.

    He added that “those who are being served from Katampe in Gwarimpa, Life Camp, Mabuchi, Maitama, Wuse II, Jahi and others will also enjoy improved supply. This is so because it has now been freed of the power it was releasing to Lugbe. In the long time, we will have the capacity to take more electricity.”

    According to him, the firm has reinforced 4,048 sub-stations in its network through maintenance services while surveying the protection system of 68 others.

    Speaking earlier at the opening session of the 17th Power Sector Meeting in Abuja yesterday, he said the reinforcement was to boost power supply and enhance health and safety in its operational environment.

    The AEDC boss noted improvement in the power sector saying, “the usual discussions in the past about power deficit is gradually giving way to discussions about increased power not being utilised. This is further supported by the rate at which incremental generation is being commissioned in the industry.”

    He noted that commissioning the 132/33Kva Kukuaba transmission sub-station by the federal government shortly after the meeting would boost power supply directly in Lugbe area of the Federal Capital Territory (FCT).

    Majority of customers in Abuja city such as Maitama, Wuse II, Gwarinpa and Mpape will also benefit from improved supply because of the freed capacity in the Katampe transmission substation, Mupwaya added.

    Reeling out other achievements of the Distribution Company (DisCo) since it was privatised in 2013, he said, “We have completed Large Power Users (LPU) metering of 3,885 customers by February 2017; flagged off metering of Small Power Users (SPU) in December, 2016 and close to 90,000 are metered so far.”

    AEDC said it has improved the organisational design, corporate governance and compliance, and improved training for its personnel.

    The Permanent Secretary in the Ministry of Power, Engr. Louis Edozien who chaired the meeting said the ministry has rolled out policy directives to address the limitation of 33Kv and 11Kv distribution infrastructures across the DisCos to solve the issues of power non-utilisation often tagged as load rejection.

    Edozien urged the DisCos not to feel threatened by the recent ‘Eligible Customer’ pronouncement that will allow certain customers to buy power directly from the Generation Companies (GenCos). He said the declaration will strengthen their services and improve revenue base to tackle the liquidity crisis in the sector.

    He also revealed that the Market Operator and the Nigeria Bulk Electricity Trading Plc (NBET) are in the process of restructuring the bulk energy debts owed by DisCos to help them raise financing while improving their services to customers.

  • Buhari appoints new chiefs for RMAFC, NBET

    Buhari appoints new chiefs for RMAFC, NBET

    President Muhammadu Buhari has approved the appointment of a chairman for the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) and the managing director/chief executive officer for Nigerian Bulk Electricity Trading Company (NBET).

    According to a statement by the Director (Press) in the Office of the Secretary to the Government of the Federation (SGF), Bolaji Adebiyi, Elias Nwalem Mbam is the new chairman for RMAFC.

    Dr. Marilyn Amobi, the statement said, is the new managing director/chief executive officer of Nigerian Bulk Electricity Trading Company (NBET).

    “Mrs. Amobi’s appointment is for a tenure of four years,” it stated.

     

  • RMAFC, NBET get new helmsmen

    President Muhammadu Buhari has approved the appointment of a Chairman for the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) and the Managing Director/Chief Executive Officer for Nigerian Bulk Electricity Trading Company (NBET).

    According to a statement by the Director (Press) in the Office of the Secretary to the Government of the Federation (SGF), Bolaji Adebiyi,  Elias Nwalem Mbam, is the new Chairman for RMAFC.

    Dr. Marilyn Amobi, the statement said, is the new Managing Director/Chief Executive Officer, NBET.

    “Mrs. Amobi’s appointment is for a tenure of four years, ‘’ the statement stated.

  • NBET names Stanbic IBTC agent

    NBET names Stanbic IBTC agent

    Stanbic IBTC Bank has been appointed by the Nigerian Bulk Electricity Trader (NBET) Plc as the payment management services provider to the bulk trader.

    The strategic arrangement, coming ahead of the transitional electricity market (TEM), is expected to make the electricity trading system transparent as well as instill confidence in the electricity market in Nigeria.

    The appointment would see the bank, which emerged through a transparent selection process handled by KPMG professional services, in line with extant regulations, undertake payments on behalf of the bulk trader and also support its treasury functions.

    As the Bulk Trader’s payment agent, Stanbic will be responsible for the efficient and effective payment processing between NBET and the GENCOs in line with the underlying power purchase agreements.

    Managing Director and Chief Executive Officer, NBET, Rumundaka Wonodi, said the engagement is a critical marker for NBET’s preparation for the transitional electricity market and that the appointment is in line with its strategy of employing the best service providers to complement its in-house competence. Wonodi said it was important for them to have gone through the procurement part to contract an agent that would support the bulk trader, thereby “keeping it a lean and efficient institution.”

    “One of the issues that we have had in the electricity market is that before the transition electricity market, even before this current period, payments and transactions seem to be crowded in a way that is not very clear to market participants,” Wonodi said. “So through this process, we hope that the generation companies will have the confidence and the comfort that when they send invoices to us, they have an institution that has the capacity to undertake those services on our behalf. That way, the confidence in the market would be enhanced and sustained.”

    Speaking at the ceremony, Chief Executive Officer, Stanbic IBTC Bank, Mr. Yinka Sanni, emphasized the bank’s long-term commitment to servicing the efficiency and transparency initiatives from NBET. He said having the bulk trader among its numerous clients was a thing of pride to the bank and commended the selection process, which he described as thorough, credible and transparent.

    Sanni said: “NBET as our strategic partners help concretize the bank’s objective of providing stellar services across the power value chain in the recently privatized Nigerian Electricity Supply Industry as it evolves into a fully market-led sector.”

  • NBET, NSIA sign agreement on $350m Eurobond Funds’ management

    NBET, NSIA sign agreement on $350m Eurobond Funds’ management

    The Nigerian Bulk Electricity Trading Plc (NBET) and the Nigeria Sovereign Investment Authority (NSIA) yesterday signed a Funds Management Agreement for the $350million allocated to NBET from the $1billion Eurobond issued by the Federal Government in July, 2013.

    The Managing Director/CEO, NBET, Rumundaka Wonodi, said NBET is pleased with the arrangement that “allows a competent fund manager like NSIA,  to manage NBET’s Eurobond facility in a manner that yields the required returns, and  yet allows the funds to be readily available for any required Bulk Traderinterventions.

    “With this arrangement, NBET can focus on developing the electricity market and catalysing the much needed investments in the power sector.”

    Also speaking at the signing ceremony, the Managing Director and Chief Executive Officer of NSIA,  Uche Orji, said the Sovereign Wealth Management Agency is pleased to enter into this asset management arrangement with NBET.

    “It is our aim to bring our proven capabilities in profitable asset management to bear for the benefit of NBET and the Nigerian power sector in general,” he said.

  • Needless guarantee

    Needless guarantee

    •N50bn public funds to the GENCOs won’t let them put in their best

    The Federal Government, through the Bureau of Public Enterprises (BPE) and the Nigerian Bulk Electricity Trading Company (NBET) Plc signed a N50billion needless escrow guarantee account agreement on power with three Nigerian banks. The banks: United Bank for Africa (UBA), First Bank Plc and First City Monument Bank (FCMB) Plc are to act as custodians of the funds and to ensure adherence to due process in the bid to access it by owners of the electricity Generation Companies (GENCOs). The generating companies are successor companies of the Power Holding Company of Nigeria (PHCN).

    The money, to be administered by NBET was part of proceeds from the privatisation of the defunct PHCN and is expected to insure the generating companies against revenue loss in their effort to boost electricity generation. According to Benjamin Dikki, Director-General, BPE, the Partial Risk Guarantee (PRG) expected from the World Bank could not be secured in the prevailing circumstance.

    Obviously, the Federal Government has shown understandable anxiety over the need to improve electricity generation in the country. This is because of the importance of stable power if the economy must truly develop. However, the way to go should have been for it to use whatever money at its disposal to develop infrastructure in the sector rather than acting as insurer to the GENCOs. The N50billion Naira would go a long way in helping to boost desired infrastructure in the power sector.

    This should not mean a denial of the fact that power generation requires a lot of financial investment. Dikki’s costing puts the average cost of installing a megawatt at about $1.3 million which we consider to be quite huge. But didn’t the GENCOs conduct due diligence before purchasing that part of PHCN? If they did, then the duty of providing guarantee should not be that of the selling government.

    And if they did not, the GENCOs are presumed to have voluntarily taken over the risks under the legal principle of volunti non fit injuria (voluntary assumption of risk) which should not be the fault of the government. It is this fear of loss that would make them put in their best to ensure the success of their business ventures in the power sector. The best the government ought to do is to provide the enabling environment through tax incentives and duty waivers on necessary machineries, among others, that could boost the generating capacities of the GENCOs, over a specific period of time. This policy negates the best tradition and spirit of free enterprise, and such guarantee will not instill discipline in the GENCO ranks.

    Going by the country’s awry antecedents in the handling/management of such funds, the sad result of this huge fund can easily be predicted. Despite government’s assurances that the money is not a gift, we have little or no confidence in a policy initiative whereby the government stands as surety for the GENCOs. The official fears that whatever is generated might not be bought by the public is unfounded as there is already in existence a huge market for whatever power may be generated by the GENCOs.

    This booty comes across as another ill-conceived policy grandstanding and misplaced priority by the government. Again, on this issue of power, the government should not be seen to be approbating and reprobating at the same time if truly it understands the whole essence of privatisation. We ask: What is the purpose of transiting the power sector from public to private enterprise when the government knows that our money would still be deployed to guarantee these investors?

  • N50b for electricity firms to boost power

    N50b for electricity firms to boost power

    Owners of the Electricty Generation Companies (GENCOs) are to get a N50 billion prop from the Federal Government, which is desperate to expand electricity generation.

    The N50 billion will come in form of a guarantee.

    On behalf of the Federal Government, the Bureau of Public Enterprises (BPE) and the Nigerian Bulk Electricity Trading Company (NBET) Plc, the government signed yesterday an escrow agreement on power with three Nigerian banks in Abuja.

    The three banks are United Bank for Africa (UBA), First Bank Plc and First City Monument Bank (FCMB) Plc, which is the lead escrow agent.

    Although the banks will take custody of the fund, the NBET will administer the N50billion, which will be raised from the proceeds of the privatization of the PHCN successor firms.

    In the absence of the World Bank to provide Partial Risk Gurantee (PRG), the fund will serve as a palliative for the new owners to improve power generation, The Nation learnt.

    But, speaking after the documents signing ceremony, the Director General, BPE, Mr. Benjamin Dikki, noted that such financial guarantee should not BE taken as a grant, considering established processes required for any generation company to benefit from it.

    His words: “This N50 billion is not a dash. There are certain conditions that must be met before funds can be drawn from this escrow account. The market and systems operator have to confirm the quantum of power that was put on the national grid. The market operator has to confirm that because of system defects and inefficiencies in the transmission network, certain amount of power was lost. So, there has to be a due process before any Genco can draw from this amount; it is not a gift because certain conditions have to be met.”

    He said :”It is actually the generation companies that are left on the high end and we need to guarantee that whatever power they generate will be paid for if not, they will lose their capital and not able to invest in expansion of their capacities.

    “We have a deficit of about 29,000 megawatts (MW) of basic power needed to stabilise our power needs of 40,000MW and the average cost of installing a megawatt is about $1.3 million and that will mean an investment of $7.5 billion for 5000MW, and so we need to make sure that we create the atmosphere that will enable these generation companies to make investments without worrying whether they will be able to recoup monies they have invested and that is why this escrow account was created,” Dikki said.

    On the roles of the banks, Dikki said: “The banks are the custodians of the money, which is deposited in them and we want to establish a process through which this money will be drawn and not just drawn frivolously; that is why the BPE, Bulk Trader and the banks signed the agreement to say that you have to follow a process to draw this money; otherwise, there will be penalties.”

    The distribution companies are not covered by this escrow account because they have committed to reducing the Aggregate Technical Commercial and Collection (ATC&C) losses of the companies.

    Dikki said: “If you recall, they (distribution companies) were not given to the highest bidder but to those that committed to reducing ATC&C losses by a certain percentage and so they have committed and have given a technical proposal with a business plan cataloguing the level of investments that they will make every year in this regard.”

  • How we’ll manage N50b power fund, by NBET

    How we’ll manage N50b power fund, by NBET

    The N50 billion earmarked by the Federal Government for the power sector will be managed by the Nigerian Bulk Electricity Trading company (NBET) to stabilise the power sector, The Nation has learnt.

    NBET’s Head, Power Procurement and Power Contracts, Yesufu Longe Alonge, said the fund would be used to provide the needed comfort and guarantee to the privatised power generating plants (GENCOS).

    The firms include Ughelli, Sapele, Afam, Shiroro and Kainji.

    He said NBET will manage the N50 billion from an escrow account, alongside the monthly receivables from the power distribution companies (DISCOS).

    On modalities for managing the money, he said NBET will pay the power generation firms every month to offset any shortfall from what they generate.

    ’’ The stakeholders will play vital roles in the electricity ecosystem. Once the Transitional Electricity Market (TEM) is declared open by the Minister of Power, NBET will start buying electricity in bulk from the generation companies through a Power Purchase Agreement (PPA), and will in turn sell the electricity to the Distribution Companies through a Vesting Contract (VC).

    “At the end of every month, the Market Operator will issue what is known as a Settlement statement to all stakeholders, stating the quantity of electricity that was sold and bought during the month. Based on the Settlement statement, the power generation companies will invoice NBET, using the unit price stated in the Power Purchase Agreement, while NBET will likewise invoice the Distribution Companies.

    “For the service charge, the market operators will invoice the Distribution companies, and thereafter, make all the necessary payment to the different service providers, such as NBET, National Electricity Regulatory Commission, Market Operators and System Operators, among others,’’ he said.

    He explained that NBET will use agents to make payment to the power generation companies, after receiving the monthly payment from the distribution Companies, adding that the N50billion was part of the proceeds from the sale of Egbin Power Plant that the government earmarked to capitalise NBET.

    He said NBETwas also capitalised via appropriation and proceeds from the sales of Euro Bond, explaining that the government provided the N50billin for the operations of successor power generation companies, because the World Bank Partial Guarantee(PRG) that was part of the sales arrangement for power generation firms is yet to be completed.

    He said the fund was not a subsidy, but rather a means of ensuring that companies get paid for the electricity generated and sold into the market. He said the power generation firms would pay back the money in future.

    Also, the Chief Executive Officer, Transcorp Ugbelli Power Limited, Adeoye Fadeyibi, said power generation firms need the money to foster growth, produce optimally and further boost economic activities.

    He said measures have been put in place on how the Generation Companies (GENCOSs) will share the N50billion earmarked for them.