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NBET to Repay CBN’s N701bn Power Intervention Fund in 10 Years

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  • NBET to Repay CBN’s N701bn Power Intervention Fund in 10 Years

The Nigerian Bulk Electricity Trading Plc (NBET) will have up to 10 years to repay the N701billion financial facility obtained from the Central Bank of Nigeria (CBN) to guarantee payments for electricity generated by the generation companies (Gencos) for the next two years, a federal government memo has disclosed.

The memo obtained in Abuja was earlier presented to the Federal Executive Council (FEC) in February 2017, by the Minister of Power, Works and Housing, Mr. Babatunde Fashola, for consideration and approval of proposed policy interventions to revive the country’s troubled power sector.

It contains the policy measures, which the government had outlined to reposition the sector, including the Power Sector Recovery Plan initiated in partnership with the World Bank wherein the Bank is expected to commit up to $2.519 billion for measures aimed at resetting and reforming the sector.

Statutorily, the NBET will, within the transitional stage of the electricity market, buy power from Gencos and independent power plants, and sell to electricity distribution companies, using legal instruments, which include power purchase agreements (PPAs) and vesting contracts.

NBET recently got a N701 billion from the CBN to guarantee Gencos’ payments for gas supplied to them.

The payments would be made directly to gas suppliers upon Gencos presentation of their gas invoices to NBET.

But providing further details on the workings of the N701 billion, the government memo stated that the NBET would have a period of 10 years to repay the loan.

It added that it would however continue to collect an average of 25 per cent of its invoice from the Discos throughout 2017, and thereafter gradually increase it over the course of 2018 to possibly 80 per cent.

“NBET enters into an agreement to borrow from the CBN through the Ministry of Finance the sum of up to N701, 936,483,451, only for disbursement over a two-year period and repayable over a 10-year period for the purpose of implementing the payment assurance program that guarantees energy payments for all electricity generation and gas supply companies on the national grid,” said the memo.

The memo also identified the other policy interventions the government was considering for the sector to include a centralised payment of the monthly electricity debts of its Ministries, Departments and Agencies (MDAs) to avoid instances of debts accrual; direct payment of existing MDAs debts to upstream market participants; and simplified tariff methodology by the Nigerian Electricity Regulatory Commission (NERC) to ensure the sector operates cost reflective tariffs.

It added thus that there will be a: “Directive to Ministry of Finance, Debt Management Office and CBN to pay off post February 1, 2015 MDA debts after verification and audit, either by direct payment to upstream market participants or a discountable payment financial instrument”.

“Directive to Ministry of Power, Works and Housing, Ministry of Finance, CBN and Discos to establish a centralised payment scheme for FGN MDAs after a rigorous audit of their energy consumption, meters, billing processes and debts. Policy directive to NERC to implement, over time, a simplified tariff methodology and order that more accurately reflects market realities, exchange rate realities, and the cost of producing and delivering the product, and with less consumer resistance through wider consultation,” the memo added.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Dangote Cement Refutes Claim it Sells Cement High in Nigeria

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Dangote Cement Plc has refuted the widely propagated story that the company sells cement at a significantly higher price in Nigeria compared to other African nations like Zambia and Ghana.

The management of the leading manufacturing company said it sells a bag at N2,450 in Obajana and Gboko, and N2,510 in Ibese, the amounts stated include VAT.

Devakumar Edwin, Dangote’s Group Executive Director, Strategy, Portfolio Development & Capital Projects, who spoke with journalists in Lagos, said the company sells for an equivalent of $5.1, including VAT in Nigeria, it sells for $7.2 in Ghana and $5.95 in Zambia ex-factory, inclusive of all taxes.

Devakumar, therefore, described the allegation as false, misleading, and unfounded, and challenged the media to conduct independent investigation into the price of cement in some other African countries, including Cameroun, Ghana, Sierra Leone, Zambia.

To ensure that we meet local demand, we had to suspend exports from our recently commissioned export terminals, thereby foregoing dollar earnings.

“We also had to reactivate our 4.5m ton capacity Gboko Plant which was closed 4 years ago and run it at a higher cost all in a bid to guarantee that we meet demand and keep the price of Cement within control in the country.”

“Over the past 15 months, our production costs have gone up significantly. About 50% of our costs are linked to USD so the cost of critical components like: gas, gypsum, bags, and spare parts; has increased significantly due to devaluation of the Naira and VAT increase.

“Despite this, DCP has not increased ex-factory prices since December 2019 till date while prices of most other building materials have gone up significantly.

“We have only adjusted our transport rates to account for higher costs of diesel, spare parts, tyres, and truck replacement. Still, we charge our customers only N300 – 350 per bag for deliveries within a 1,200km radius.

“We have been responsible enough not to even attempt to cash in on the recent rise in demand to increase prices so far,” Devakumar said.

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Samsung, Vision Care Begin Fresh CSR Activities, Earmark 12,000 Masks for Nigeria

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Samsung Heavy Industries Nigeria Limited (SHIN) and Vision Care, an international relief organization dedicated to the prevention of blindness, have launched fresh Corporate Social Responsibility (CSR) initiative to help Nigeria mitigate the impact of COVID-19 pandemic.

Vision Care is a member of the International Agency for the Prevention of Blindness (IAPB), and participant of ‘VISION 2020’, a global initiative of the IAPB and the World Health Organisation (WHO).

Vision Care has since conducted more than 25 Vision Eye Camps yearly and has grown into an international non-profit organisation serving 38 countries throughout Asia, Africa and Central-South America.

Since 2015, SHIN has worked with Vision Care in the yearly Eye Camp as part of its Corporate Social Responsibility (CSR) to provide free cataract surgeries to Nigerians who cannot afford the payment. SHIN has been sponsoring the eye surgeries of Nigerians on a yearly basis.

In 2019, SHIN sponsored the eye surgeries of at least 115 Nigerian patients and 224 outward patients as part of its CSR in Nigeria.

Since it started the programme, SHIN has sponsored the eye surgeries of 572 Nigerian patients, 1,593 outward patients and has also donated glasses to 99 patients.

Due to outbreak of the COVID-19 Pandemic, the yearly Eye Camp for 2021 had been called off to adhere to Federal Government’s measures in response to the virus.

Consequently, SHIN and Vision Care came up with a fresh CSR initiative this year to donate 496 bags of rice (25kg) and 12,000 reusable face masks to three states in the country to fulfill their commitment of contributing to the society.

The items will be delivered later this month.

The three states that will benefit from the donation are Lagos, Kano and Bayelsa states.

Out of the 496 bags of rice, and 12,000 facemasks, Lagos will receive 96 bags of rice and 200 masks.

SHIN also stated that Kano State will receive 200 bags of rice and 5,000 masks, while Bayelsa State will get 200 bags and 5,000 masks.

“This is an additional CSR activity from SHI in addition to SHIN’s donation of 5,000 COVID-19 test kits from Korea. The washable masks that the head office has purchased from Korea are certified to retain its effectiveness against COVID-19 transmission for up to 50 washes,” SHIN said in a statement.

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Senate Summons NICON, AIICO, Others Over N17.4bn Pension Remittances

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The Senate Public Accounts Committee has summoned the management of the NICON Insurance Plc, AIICO Insurance and other insurance companies over their alleged failure to remit N17.4bn pension fund to the Pension Transitional Arrangement Directorate.

The Senate hinged the summon on the 2016 report of the Auditor-General for the Federation which unraveled the alleged non-remittance of N17.4bn pension fund to PTAD.

Appearing before the panel on Monday, the Executive Secretary of PTAD, Dr Chioma Ejikeme, informed the lawmakers that PTAD took over the assets and liabilities of the defunct pension offices without a formal handing over.

She said, “On taking over, the directorate wrote all underwriters to make returns and remit whatever amount that was in their custody into a CBN dedicated account.

“Some of the underwriters responded to the request while some did not.

“The bank certificate of balances, accounting statements, three years financial statements and policy files requested by the federal auditor were not handed over to PTAD at the time of consolidation.

“It is worthy to note that we discovered that N17.4bn which comprised of cash, securities and properties from the nine insurance underwriters was unremitted as a result of the letter PTAD sent to them.

“These figures represent the claims by the underwriters with regards to their indebtedness.

“In order to ascertain the true position of legacy funds in custody of underwriters, the directorate appointed a consultant in 2018 who carried out forensic audit of nine out the 12 insurance underwriters and produced a final report on the recovery of the legacy funds and assets for PTAD.”

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