The federal government has explained that the reconstitution of the Board of the Nigerian Bulk Electricity Trading Company (NBET) was necessitated by the challenges of the power sector, particularly those of achieving its mandate.
It noted that the contractual obligations and guarantees NBET issues and manages are therefore of strategic importance for the repositioning of the sector and delivering of benefits to Nigerians for which the Bulk Trader was established.
The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, who spoke in Abuja, Monday at the inauguration of the reconstituted board, said the reconstitution took consideration of the current stage of evolution of the restructured electricity sector, the complexities the sector currently faces, multi-disciplinary skills of prospective board members especially in finance and investment, electricity generation, system operations of deregulated electricity markets, administrative law, as well as economic regulation of network utilities, among other factors.
She said: “To this end, we are all seated here and it is important that we bring our skills and experiences to bear in this critical assignment.”
On understanding the role of NBET, she said: “We have all come to better understand the role of NBET as the manager and administrator of the electricity pool in the Nigerian Electricity Supply Industry (NESI), and how it buys electricity from the generating companies (GenCos) including Independent Power Producers (IPPs) under Power Purchase Agreements (PPAs) and resells it to the distribution companies (DisCos) via vesting contracts.”
Noting that the role of NBET in the stabilisation of the power sector cannot be overemphasised as it plays a key role in the generation of market confidence through well-negotiated and well-aligned contracts with fair risk allocation that protects market participants from credit and systemic risks, Ahmed explained that the bulk trader stands as a de-risking agent in the power industry as it acts as a credit worthy off-taker of power procured from Gencos in the absence of bi-lateral contracts between gencos and discos.
The contractual obligations and guarantees NBET issues and manages, according to her, are therefore of strategic importance for the repositioning of the sector and delivering of benefits to Nigerians for which NBET was established.
Stressing the need to build NBET to become that defensive wall against potential payment defaults till Gencos and Discos are able to enter into power purchase agreements on bilateral basis, the minister stated that NBET has to be able to successfully fulfill its role in the management and administration of financial flows in the sector, the promotion of a contract-based market that allocates risks efficiently to parties responsible for them and the formulation of policies for efficient system settlement.
She noted that the “electricity deregulation is still evolving in Nigeria, and the country is basically learning as the privatized market evolves. However, we do not have all the time, as the longer it takes, the more costly it is financially for Nigerians and the country at large”.
She, therefore, urged the members to ensure all hands are on deck and that their tenure as the board in the transitional market trading arrangement should leave a good mark in the sands of time.
President Muhammadu Buhari had recently approved the reconstituted Board of Directors of NBET, which encompasses a non-executive director from the Ministry of Power, to be represented by a member of staff not below the level of a director; Mr. Alexander Ayoola Okoh, as non–executive director from the Bureau of Public Enterprises (80 per cent shareholder in NBET); Ms. Patience Oniha, Director-General, Debt Management Office (DMO), as non-executive director; and Mr Ben Akabueze, Director-General, Budget Office of the Federation as non-executive director.
Also appointed are Suleyman Ndanusa, a former Director-General of the Securities and Exchange Commission (SEC), as non-executive director (Independent); Mustapha Balarabe Shehu, a former President, Nigeria Society of Engineers (NSE), as non-executive director (Independent); and Mr. Adeyeye Adepegba, non-executive director (Independent).
The former Managing Director/Chief Executive Officer, Dr. Marilyn Amobi, who was recently sacked by the federal government was replaced by Dr. Nnaemeka Eweluka.