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Power: Discos Settle Fines as FG Reconnects Firms

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  • Power: Discos Settle Fines as FG Reconnects Firms

The Federal Government has reconnected three power distribution companies to the national grid and has lifted the suspension it slammed on the power firms after the Discos paid the stipulated fines attached to the infractions they committed, as well as fixed the deficiencies in their respective systems.

The affected power firms include Enugu, Eko and Ikeja Discos, as it was further learnt that the Nigerian Electricity Regulatory Commission had yet to give approval for the procurement of spinning reserve, despite receiving a request for it over six months ago.

Spinning reserve is the generation capacity that is online but unloaded and that can respond within 10 minutes to compensate for generation or transmission outages.

The Managing Director, Transmission Company of Nigeria, a firm fully owned by Federal Government, Usman Mohammed, who spoke on the spinning reserve issue, stated in Abuja on Thursday that the three Discos were disconnected from the grid for failing to comply with the market rules.

He, however, noted that they were reconnected after they cleared the deficiencies in their systems and settled the penalties that followed.

In June this year, the Federal Government, through TCN, ordered the disconnection of the three Discos from the national grid over “non-compliance with the conditions of market rules.”

But reacting to this in Abuja, Mohammed said, “The suspension of the three Discos was due to the fact that their security had elapsed and they did not replace it. They were suspended from the market according to the market rules to ensure that we don’t allow this kind of thing to happen again.

“Now after their suspension and what we achieved based on that, I’ll like to tell you that they have put or fixed all the deficiencies that they have and they have also paid the penalty that they are supposed to pay. That is how to make a market work.”

On the issue of spinning reserve, he said, “We have successfully worked out how to get 250MW of spinning reserve. Now is that adequate? The answer is no. With the average generation of about 4,000 megawatts, the spinning reserve is supposed to be 10 per cent and that is 400MW.

“But when we advertised for the procurement of spinning reserve and generators responded, we realised that what we can procure conveniently is only 250MW. Also, it is not every generator that has the capacity to provide to spinning reserve. A generator that cannot respond quickly cannot provide a spinning reserve.”

Mohammed added, “So 250MW spinning reserve is not enough but it is better because it will further stabilise the grid and make the grid more stable than what it is now. We forwarded the spinning reserve request to NERC in December 2018 and up till today, we have not received approval. We are still calling for us to have a spinning reserve in order to further stabilise the grid.”

The TCN boss also stated that the company had been struggling with frequency control since May 2 this year, adding that this was because of the weak distribution network in Nigeria.

“So, once it starts raining, most of the distribution networks will start to collapse and as a result frequency management becomes a big issue,” he stated.

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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Portland Paints, Chemical and Allied Products Plc Agreed to Merge

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Portland Paints

Portland Paints, Chemical and Allied Products Plc Agreed to Merge

Portland Paints and Products Nigeria Plc and Chemical and Allied Products Plc have agreed to merge, according to the latest statement from both companies.

In a statement released through the Nigerian Stock Exchange, the Board of Directors of CAP said we are “pleased to inform you that following discussions and negotiations, the Boards of CAP and Portland Paints have reached an agreement to undertake a merger between both entities (the “Merger” or the “Proposed Merger”).

Accordingly, we “hereby present to you the terms and benefits of the Proposed Merger for your consideration and seek your support and approval to effect the Proposed Merger.

“The Proposed Merger presents a compelling opportunity to create significant value for shareholders of CAP and achieve the company’s strategic growth objectives as a larger company with a broader product portfolio, more corporate owned brands and diversified revenues.

“The resultant entity is also expected to benefit from enhanced distribution capabilities in addition to economies of scale and operational efficiencies.”

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Tony Elumelu Acquires Shell, Total, ENI Stakes in OML 17

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Tony Elumelu Acquires Shell, Total, ENI Stakes in OML 17

Tony Elumelu owned Heir Holdings Limited and its related company Transnational Corporation of Nigeria Plc on Friday announced it has completed the purchase of 45 percent stake in Oil Mining Lease (OML 17) through TNOG Oil and Gas Limited.

The acquisition includes all assets of Shell Petroleum Development Company of Nigeria Limited (30 Percent), Total E&P Nigeria Ltd (10 percent) and ENI (five percent) — in the lease.

It was further stated that TNOG Oil and Gas Limited will also have the sole right to operate OML 17.

The field presently has a production capacity of 27,000 barrels per day. Also, there are estimated 2P reserves (proven and probable) of 1.2 billion barrels and an additional one billion barrels in possible reserves — all of oil equivalent.

A consortium of global and regional banks and investors provided a financing component of $1.1 billion for the largest oil and gas financing in Africa in over a decade.

In a statement released on Friday, Shell said the completion was after all the necessary approvals have were received from authorities.

“A total of $453m was paid at completion with the balance to be paid over an agreed period. SPDC will retain its interest in the Port Harcourt Industrial and Residential Areas, which fall within the lease area,” the SPDC said.

Speaking after the completion of the deal, Elumelu said “We have a very clear vision: creating Africa’s first integrated energy multinational, a global quality business, uniquely focused on Africa and Africa’s energy needs. The acquisition of such a high-quality asset, with significant potential for further growth, is a strong statement of our confidence in Nigeria, the Nigerian oil and gas sector and a tribute to the extremely high-quality management team that we have assembled.

“As a Nigerian, and more particularly an indigene of the Niger Delta region, I understand well our responsibilities that come with stewardship of the asset, our engagement with communities and the strategic importance of the oil and gas sector in Nigeria. We see significant benefits from integrating our production, with our ability to power Nigeria, through Transcorp, and deliver value across the energy value chain.

“I would like to thank Shell, Total and ENI, for the professionalism of the process, the Federal Government of Nigeria, the Ministry of Petroleum Resources, and the NNPC for the confidence they have placed in us.”

Tony Elumelu is the Chairman of Heirs Holdings Limited, Transcorp and United Bank for Africa Plc.

Also, read Transcorp Plc Acquires FGN’s 100% Equity in Afam Power for N105 Billion

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Exporters Say CBN Pre-export Requirements is Frustrating Export of Goods

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Institute of Chartered Shipbrokers

Exporters Say CBN Pre-export Requirements is Frustrating Export of Goods

Exporters have said the recently introduced pre-export requirements by the Central Bank of Nigeria is creating unnecessary bottlenecks for exporters and the movement of goods out of the country.

Exporters, who spoke under the aegis of the Network of Practicing Non-oil Exporters of Nigeria (NPNEN), said the electronic Nigeria Export Proceed Form now required by financial institutions from exporters had come with so many challenges.

Ahmed Rabiu, the President, NPNEN, explained that the new policy had several requirements that often led to delays and loss of income on the part of exporters.

He said, “We acknowledge the CBN’s desire to ensure that all exports out of Nigeria are documented in order to ensure that the proceeds of such exports are repatriated.

“However, the reality on the field shows that the process is causing undue delays and consequently, encouraging corruption.

According to them, in the new pre-export requirements, the Central Bank of Nigeria wants an export transaction to be initiated through eNXP processing on the trade monitoring system.

After which exporters are expected to have a pre-shipment inspection agent, the Nigeria Customs Service and other designated government agencies carry out their pre-export inspections.

The exporters said the pre-shipment inspection agent was expected to issue a clean Certificate of Inspection while Customs would issue the Single Good Declaration. All these they said takes time and delay goods from leaving the country on time.

Pointing to a recent report, they said about N868 billion worth of goods bound for export were stuck at the ports due to the new policy.

Speaking further Rabiu said, “For example, for the PIA to issue the CCI, the exporter is required to upload a certificate of origin as one of the supporting documents for the eNXP.

“The PIA is also required to upload the CCI to the TRMS(M) and until this is done, the Customs service will not issue the Single Good Declaration.”

He added, “After issuing the SGD, the customs is further required to upload it into the TRMS before the goods are allowed to be gated into the port and loaded on the vessel by the shipping line.

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