The Nigerian Bulk Electricity Trading Company (NBET) Plc has again assured that its $800 million (about â‚¦128 billion) cash capitalisation, which came in proceeds from the privatisation of successor generation companies of defunct Power Holding Company of Nigeria (PHCN), Eurobond of the federal government and statutory budgetary provisions will guarantee the investment confidence in Nigeria’s Electricity Supply Industry (NESI).
Managing Director of NBET, Rumundaka Wonodi stated at the just concluded national power forum in Abuja that while the capitalisation fund is not planned to be exhausted overtime, it is expected to provide a revolving buffer that will guarantee consistent production and distribution of electricity across the country.
Wonodi said in a presentation at the forum that the NBET, which is also known as the “bulk trader” has worked through its system to guarantee supply to electricity to distribution companies in the country, thus providing sustainable leverage for the electricity market to grow.
He also spoke of the bulk trader’s commitment to upholding extant agreements entered with it in the sector, adding that such parallel commitments from other market participants could ultimately drive down the retail price of electricity in the country.
“NBET guarantees value to market by procuring power at cheapest cost possible and vesting contracts guarantee each DisCo a share of Bulk Trader PPA portfolio.
We are equally disposed to bridging temporary revenue gap for DisCos due to systemic risks and therefore keep the IPPs producing,” Wonodi said.
On the necessity to create a viable market, Wonodi said it will ensure growth in power generation to drive down retail price, reduce technical and commercial losses to maximise power delivery and improve revenues of the distribution companies while equally guaranteeing aggressive investment in transmission infrastructure to improve wheeling capacity, stability and reach of network.
According to him, investment in gas transportation infrastructure to power for improved capacity, fair, transparent and stable regulatory environment both in and out of the industry, as well as coherent, consistent and non-conflicting policies by government should be engendered to compliment efforts of market participants in sustaining the growth trajectory of the NESI.
On NBET’s commitment to the sector, Wonodi commented: “Tightly coupled agreements that align incentives for best performance by all counterparts along the value chain, dedication to due-process and transparency, maintaining robust capitalisation with support of the federal government for market confidence are parts of what we are committed to doing.”
“We will institute and continue to refine internal processes and procedure, diligent engagement of potential power generation projects to ascertain viability, and constantly striving to provide the best value for the end- users,” he added.
On the NBET’s near-term outlook, which indicates the bulk trader’s preparedness for the Transitional Electricity Market (TEM), Wonodi said:“Shadow trading in the interim period in preparation for Transitional Electricity Market-novation of all existing PHCN PPA’s before TEM, conclusion of PPAs for all brownfield IPPs before TEM and workshop for new IPPs and DisCo owners on the PPA and vesting contract are planned to take place in the near outlook.
We will also be testing NBET contract management processes, execution of wind, solar and coal PPAs by ensuring diversification of generation mix as well as bulk competitive power procurement based on NERC issued guidelines.”