THE federal government is happy that Nigeria’s Electricity Supply Industry, NESI, is now showing signs of an electricity market with globally recognised standards in trading arrangements especially with regards to the presence of two key agencies. Namadi Sambo, vice-president, said the presence of the Nigerian Electricity Regulatory Commission, NERC, and the Nigeria Bulk Electricity Trading Plc, NBET, have provided the requisite conditions to attract essential funding and investments into the country’s electricity market.
He explained that through specific electricity regulatory and off-taker functions, both the NERC and NBET now provide operators in the electricity value chain, the leverage to undertake electricity operations without inhibition. “Today, we have a strong enabling law, the Electric Power Sector Reform (EPSR) Act 2005, which forms the backbone for development of the sector. By way of further specific details, we have a well capacitated and operationally independent sector regulator- the NERC as well as a capitalised off-taker-NBET Plc. With these two institutions, power can now be generated, transmitted and distributed under market terms that are defined by globally recognised willing seller and willing buyer conditions. The new investors covering the entire value chain of the sector; the gas producers, generation companies, distribution companies, Independent Power Producers and meter producers are now able to expand, upgrade and modernise without any inhibition whatsoever,” he said.
The NERC recently reviewed the price regime for gas-to-power and partnered with the Central Bank of Nigeria, CBN, to secure financial intervention for payment of legacy gas related debts owed to gas producers, in addition to strengthening its regulation of the sector. Likewise, the NBET has initiated creative means of sustaining its capitalisation account by handing over about $300 million of its own share of the government sourced Eurobond to the Nigerian Sovereign Wealth Investment Authority, NSIA, to invest and make profits that would repay accrued interests on the Eurobond in addition to achieving a closure on its first negotiated Power Purchase Agreement, PPA, with Azura-IPP.
Reports indicate that both agencies have also provided other countries with evolving electricity markets within the West Africa region with valuable learning curves through their experiences. Sambo, however, noted that they remain relevant to the growth of Nigeria’s electricity market, as the government looks poised to allow the sector play its role in Nigeria’s economic development.
New Payment Deadline for Afam and Kaduna Power Plants
PREFERRED bidders for the Afam Power Plc and the Kaduna Electricity Distribution Company have been given 60 more days within which to pay the balance of 75 percent of the purchase prices. The deadline extension was announced on Tuesday, August 19, by the Bureau of Public Enterprises, BPE.
The government stated that it had granted the request for deadline extension made by the Televeras Group and Northwest Power Plc, the preferred bidders for Afam and Kaduna power plants, respectively, from August 6, 2014 to October 6, 2014. Televeras had paid the initial deposit of 25 percent of the bid price of $65,012,500 for the Afam power plant and Northwest Power Plc paid $40,750,000 for the Kaduna Disco, following which the Share Purchase Agreements were executed by the two parties. They were required to pay the balance of the bid prices within six months of the execution of the SPAs on August 6, 2014.
A statement issued by Chigbo Anichebe, head, public communications, BPE, said the Televeras Group had pleaded that the non-execution of the gas agreements required to bring the transaction to a financial conclusion and security challenges were reasons for seeking the extension. The Televeras Group, had on May 19, 2014 requested from the federal government an extension of time to pay the balance of the 75 percent bid price for the Afam plant.
It had stated that gas agreement that was germane to the completion of the transaction under the Share Purchase Agreement it signed with the federal government had not been executed. “Televeras noted that the bankability of the transaction was predicated on the execution of the gas agreement and that the non-execution of the agreement had made it difficult to satisfy the due diligence enquiry required for the raising of funds for the financing of its pre and post acquisition plans,” the BPE said.
For the Northwest Power Limited, the bureau said the firm had, on July 25, 2014, requested for an extension of the transaction timeline by 60 days due to the recent security challenges experienced in Kaduna. This, according to Northwest Power, made its offshore financiers to postpone disbursement of bank facilities already obtained.
The company explained that though it had secured financing for the transaction from a foreign bank, the financial institution had requested for additional time to review the transaction in the aftermath of the security challenges in Kaduna to ensure adequate safety of its funds.
Genesis Electricity Wins Power Award
GENESIS Electricity Ltd, GEL, has been declared the African Power Utility of the year at the Africa Utility Week Awards. At the annual awards which held at the International Convention Centre in Cape Town, South Africa, winners were selected by an independent panel of judges based on their excellence in any one of the power utilities in Africa.
Some of the fields considered were service delivery, project roll-out, technology roll-out, revenue protection measures, loss reduction, grid integration and new energy sources. Those who made the finalist in the category that Genesis won, included, Copperbelt Energy Corporation, Kenya Electricity Transmission Company, Genesis Electricity Limited, and ZESCO Limited of Zambia.
Genesis was recognised for its multiple projects deployment in a few countries in Africa over the past nine years and particularly for the development of the 84MW off-grid gas-fired power plant at the Nigerian National Petroleum Corporation owned, Port Harcourt Refining Company, PHRC. It is estimated that almost 50 percent of Nigeria’s petrol, diesel oil, kerosene and other refined products requirements can be met by the PHRC when operating at full capacity, and thus significantly reducing the huge petroleum products importation bills currently being incurred by the Nigerian government.
Akinwole Omoboriowo, chief executive officer, Genesis Electricity, has also been listed amongst the 60 Most Influential Figures in East and West African Power in ESI Africa 2014. Commenting on the award, he said: “We at Genesis Electricity are elated, and indeed, humbled by so great an honour to be recognised with an award of such magnitude. We congratulate the Federal Government of Nigeria for creating and fostering a vibrant enabling environment for the power sector in Nigeria. We also thank government for granting us the opportunity to invest in the construction of the 84MW off-grid electric power supply solution to the largest refinery complex in Sub Sahara Africa, the Port Harcourt Refining Company.”
Compiled by Anayo Ezugwu
— Sep. 1, 2014 @ 01:00 GMT