Electricity: Broken Agreement Impedes Performance


What is NBET?

The Nigerian Bulk Electricity Trading Plc, (NBET) aka the Bulk Trader, was incorporated on the 29th of July, 2010 as the SPV for carrying out, under license from NERC, the bulk purchase and resale function contemplated by the EPSRA. As such NBET has been set up to “engage in the purchase and resale of electric power and ancillary services from independent power producers and from the successor generation companies”.

Who owns NBET?

NBET is a Federal Government of Nigeria owned public liability company with two institutional shareholders with the following stakes: the Bureau of Public Enterprise (BPE) has 80% stake while the Ministry of Finance (MOF) incorporated has 20% stake.

What does NBET actually do?

The NBET is basically an intermediary between the generation companies and distribution companies. The bulk trader is in charge of managing and monitoring the bulk trading of electric power between the two bodies. They purchase electricity from the generating companies through Power Purchase Agreements (PPAs) and sell to the distribution companies through Vesting Contracts and to International customers through Interconnection Agreements.

The mandates of the Nigerian Bulk Electricity Trading Plc are;

  • To put in place an effective transaction environment which minimises risk and allocates it fairly to the parties best able to manage these risks.
  • To implement a procurement process that is transparent and will result in the economic procurement of needed power.
  • To enter into contracts that are well structured and managed in a manner that precludes recourse to any credit guarantee instrument.
  • To novate contracts and wind up as soon as the DISCOs are ready to take on their own procurement.

What is the relationship between NBET and GENCOs?

NBET has the right and licenses to purchase electricity from Gencos. That is, NBET is the contractual party to all power purchase agreements (PPA) that are signed with the generation companies. The PPA allows NBET to purchase all capacity, energy and ancillary service produced by the Generation Companies.

What is the relationship between NBET and DISCOs?

NBET has all rights and licenses to sell electricity to the Discos. In other words, the body is the contractual party to all Vesting Contracts (VC) that are signed with the distribution companies. The VC allows NBET to sell all capacity, energy and ancillary service produced by the Generation Companies to the distribution companies.


Source: Sparkonline

(Visited 60 times, 1 visits today)

Powered by Nextier