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FG, W’Bank Officials to Meet in Washington to Conclude Power Recovery Plan

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  • FG, W’Bank Officials to Meet in Washington to Conclude Power Recovery Plan

Nigeria and the World Bank Group would meet this week in Washington D.C. to discuss and possibly conclude operational terms in the power sector recovery plan, which both parties have worked on and agreed to use to respond adequately to the current challenges threatening Nigeria’s electricity sector.

Reporters learnt on Sunday in Abuja that the Minister of Power, Works and Housing, Mr. Babatunde Fashola, will lead a team comprising key officials in his ministry and the Office of the Vice President to the meeting which is expected to hold on the sidelines of the annual World Bank/International Monetary Fund (IMF) spring meetings.

Reliable sources that are privy to this, confirmed that the meeting was purposely arranged to hold at the time of the spring meetings which will hold between April 21 and 23.

The sources explained that Nigeria and the World Bank would take time out to discuss key factors in the implementation of the power sector recovery plan.

Just last week, Fashola confirmed that the Federal Executive Council (FEC) had approved the plan for use, paving the way for Nigeria and the Bank to conclude discussions on the plan.

However, total funding under the plan has not been disclosed by either the federal government or the Bank.

Last December, the government and the Bank were working on a recovery plan that would among other objectives seek to improve the technical and commercial performance of the country’s privatised power sector, as well as restore its business viability.

The recommendations in the plan were reportedly based on a joint diagnostic exercise conducted on the sector by the government and the Bank.

Even though the government recently approved a N701 billion payment guarantee to the Nigerian Bulk Electricity Trading Plc (NBET) to support its financial commitments to power generation companies (Gencos) in the country, Nigeria’s electricity market still contends with illiquidity, which analysts said could lead to total market failure if not addressed.

Based on this, the recovery plan was originated to turnaround the sector by helping to improve its governance practices, reduce technical and commercial electricity losses, and guarantee efficient sector investments.

When the plan was being worked on, the government and the Bank reportedly agreed that there were causes and dimensions to the challenges of the sector, and that the sector needed urgent attention to restore its financial tolerance to attract significant private sector investments.

It was further learnt that the World Bank would from this galvanise private and public sector investments through its various groups to support the power sector.

Also, both parties agreed on the need to prioritise actions that will strengthen the sector’s governance including the appointment of Commissioners for the Nigerian Electricity Regulatory Commission (NERC) which has already been done, restore investors’ confidence, attract public and private investment in generation, transmission, and distribution for enhanced service quality, and protect sector revenues with improved metering and collection.

The sources revealed that the planned Washington meeting would have other arms of the World Bank including the International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA) in attendance.

They explained that a couple of new generation projects like the solar power projects, for which the government has signed Power Purchase Agreements (PPAs) in July 2016, need the backing of the World Bank’s Partial Risk Guarantee (PRG) to move to closure, but have been held back and are waiting for the recovery plan to be launched.

Meanwhile, a report presented by NERC to power sector operators at their last monthly meeting in Oshogbo, Osun State, indicated that the 11 Discos performed woefully with meeting their metering plan in 2016.

NERC stated that while the Discos committed to add 1,754,800 meters in 2016, they only rolled out 215,424 meters, representing 12 per cent of the target.

The report showed that while Ibadan Disco provided the most number of meters – 67,473, representing 27 per cent of its metering commitment for 2016, Enugu Disco was the worst performer with just 2,356 meters, representing one per cent of its commitment for last year.

NERC also explained that there was a sharp decline in revenue remittances to the market by the Discos in 2016, with remittances to NBET falling from 51 per cent in 2015 to 26 per cent in 2016.

It said this was still causing major liquidity problems for the market.

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Ukraine Strikes Russian Fuel Depot, Sparking Fires in Belgorod Region

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Russian Mercenaries

The governor of Russia’s southern Belgorod region said on Sunday Ukrainian forces attacked a fuel depot, triggering a series of fires after Moscow and Kyiv accused each other of launching overnight attacks on border regions.

“The Ukrainian military, aided by lethal drones, attacked a fuel storage site in Volokonovsky district,” Vyacheslav Gladkov wrote on Telegram, referring to an area near the border.

“Several reservoirs caught fire in an explosion. Firefighting crews are putting out the blaze.”

Gladkov also reported drone attacks on three other localities. There were no casualties reported in the incidents.

In the overnight air attacks, Ukrainian officials said two people died and four were injured in Sumy region. Gladkov reported three civilians were injured in Belgorod.

Two children were among those injured in Sumy, the military administration of the northeastern Ukrainian region said on Sunday on Telegram. Several homes and cars were damaged.

In Belgorod region, three civilians, including two children, were injured. Gladkov said two residential buildings were destroyed and more than 15 buildings in total were damaged.

The Russian defence ministry said it had destroyed one drone over Belgorod region and another over Kursk region, where Ukrainian forces launched a cross-border incursion last month. It said two drones were intercepted over Belgorod overnight.

Border regions on both sides have been subject to frequent attacks. Both Moscow and Kyiv deny targeting civilians, saying the attacks are aimed at destroying each other’s infrastructure critical to war efforts.

Thousands of civilians have died in the war, which Russia started with a full-scale invasion on Ukraine in February 2022. Millions of Ukrainians have also been displaced, while their cities and villages have become piles of rubble

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Ghana Ordered to Pay $111.5M to Power Company After U.S. Court Ruling

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ghana

The government of Ghana has been ordered to pay $111.5 million to Ghana Power Generation Company (GPGC) following a ruling by a District of Columbia Court in the United States.

This ruling was granted in favor of GPGC after Ghana failed to respond to an earlier tribunal ruling from the United Kingdom, which found the country in breach of a power purchase agreement.

The court’s decision comes after Ghana terminated its contract with GPGC on February 18, 2018. The UK tribunal, in its final award dated January 26, 2021, found that Ghana had violated its contractual obligations, resulting in significant financial damages for GPGC.

The tribunal initially awarded GPGC $134.3 million in damages, calculated using the Early Termination Payment formula as specified in the purchase agreement.

Ghana, however, did not comply with the tribunal’s verdict, prompting GPGC to pursue the matter in U.S. courts. On January 19, 2024, GPGC filed a lawsuit in the District of Columbia, citing the Federal Arbitration Act and the New York Convention, which provides for the recognition of international arbitration awards.

Court documents reveal that the petition was formally delivered to Ghana’s Ministry of Foreign Affairs and Regional Integration on January 23, 2024.

Despite receiving the legal documents, Ghana failed to respond to the court proceedings by the March 29, 2024, deadline. This non-response led the U.S. court to grant a default judgment in favor of GPGC.

Chief Judge James E. Boasberg emphasized that the arbitral judgment fell under the New York Convention, which requires member states, including the United States, to recognize and enforce international arbitration awards.

He further noted that Ghana had voluntarily submitted to international arbitration when entering the power purchase agreement, waiving its sovereign immunity in the process.

Although GPGC was not awarded pre-judgment interest, Ghana will be obligated to pay post-judgment interest at rates set by U.S. law.

This adds an additional financial burden to the $111.5 million judgment as the payment accrues further interest over time.

The country narrowly avoided a separate $11 billion arbitration award in the infamous P&ID case, which was eventually overturned due to findings of corruption and bribery.

However, in the GPGC case, multiple European courts have upheld enforcement orders, leaving Ghana with limited legal recourse.

The court’s decision is expected to place added pressure on Ghana as it faces mounting financial obligations related to international arbitration disputes.

GPGC has indicated that it will pursue all available legal avenues to ensure full recovery of the damages awarded by the tribunal, including possible enforcement actions in other jurisdictions.

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Zhongshang Fucheng Moves to Auction Nigerian Properties in UK Following $70M Arbitration Award

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Bola Tinubu

Zhongshang Fucheng Industrial Investment Ltd has escalated its efforts to collect a $70 million arbitration award from Nigeria by putting two residential properties in Liverpool up for sale.

This significant development follows a 2021 arbitration verdict against Nigeria, which remains unsettled.

The Chinese investment group has reportedly listed two buildings linked to the Nigerian government—15 Aigburth Hall Road and Beech Lodge, 49 Calderstones Road—on the global online marketplace eBay.

The move is part of a broader strategy to recover the outstanding $70 million, which includes a principal amount of $55,675,000, plus interest and legal costs, as stipulated by the arbitration verdict.

The arbitration stemmed from a dispute between Zhongshang Fucheng and Ogun State over a trade treaty violation.

The company claimed that Ogun State rescinded its rights to a free trade zone in 2016, prompting a legal battle that saw Zhongshang’s executives expelled from Nigeria.

The British court granted Zhongshang the authority to seize Nigerian assets in the UK after the Nigerian government failed to settle the arbitration judgment.

The seizure and subsequent auction of these properties mark a pivotal moment in the ongoing legal conflict.

The properties were confiscated because they were not classified as diplomatic or consular assets, making them subject to seizure under the court’s orders.

According to sources familiar with the situation, the properties are valued at approximately $2.2 million.

Zhongshang Fucheng has opted for an online auction to expedite the sale, aiming to reach a broad pool of potential buyers.

The decision to use eBay highlights the company’s commitment to transparency and swift asset recovery.

“This move is not just about recovering the funds; it’s a demonstration of our commitment to enforcing the arbitration award and ensuring that due process is followed,” said a consultant working with Zhongshang Fucheng, who spoke on condition of anonymity.

The Nigerian government, already grappling with similar arbitration cases, is facing increased scrutiny as European courts have granted enforcement orders in several countries, including the UK, Belgium, and France.

The ongoing conflict with Zhongshang Fucheng has intensified pressure on Nigerian authorities to address these legal and financial challenges more effectively.

In June 2024, the UK High Court, King’s Bench Division, ruled in favor of Zhongshang’s right to seize the Liverpool properties.

Master Lisa Sullivan’s ruling emphasized that the properties were used for commercial purposes, thereby excluding them from sovereign immunity protections.

The case against Nigeria underscores broader issues related to international arbitration and asset recovery, reflecting a growing trend of global legal disputes over state assets.

For Zhongshang Fucheng, the auction of the Liverpool properties represents a critical step in securing the funds awarded by the arbitration panel.

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