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‘GenCos sell cheap power to neighbouring countries’

Published

1 year ago

July 10, 2023

‘GenCos sell cheap power to neighbouring countries’

Some electricity Generating Companies (GenCos) sell electricity to neighbouring countries at a lower cost than the Distribution Companies (DisCos) in Nigeria, a document obtained at the weekend by The Nation has shown.

Although the document did not show the price differentials, it said the errant GenCos were carrying “unregulated sales or secret deals” to earn foreign exchange at all cost” and in defiance of an existing Federal Government directive.

The GenCos are also said to be sidelining the Nigerian Bulk Electricity Trading Plc (NBET), a government agency in charge of the novation of international agreements. There are 24 registered GenCos in the country.

The Federal Government has been losing revenue from the sales of electricity to the neighbouring, it was learnt.

According to the document, in Q2 and Q4 of 2022, about $16.92 million in invoices were exchanged between GenCos and international customers in Niger, Benin Republics and Togo.

The Federal Government in 2019 streamlined the sale of electricity to foreign or neighbouring countries.

Investigation showed the breaches by the few GenCos include the violation of the transfer Order made pursuant to Section 10 of the Electric Power Sector Reform Act (EPSRA) by the National Council on Privatisation (NCP).

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Worried by non-adherence to International Power Sale Agreement (IPSA), the administration of ex-President Muhammadu Buhari waded in to guide the GenCos.

In a memo dated July 12, 2019, the Presidency directed NBET to oversee IPSA.

An industry source, who spoke on the development, called on President Bola Tinubu to take ”a serious look at the breaches being committed by the GenCos on international power sales“

The source, who declined to be named, said: ”What has been happening is the sidelining of NBET. Electricity is now being sold to neighbouring countries in an unregulated way.

“Buhari had directed that all international sales and purchase agreements must be negotiated directly with NBET unless otherwise approved by him ( ex-President).

“The directive became necessary in order to align with the configuration of the Nigerian electricity industry after privatisation. But this is not the case.

“The sales of electricity to foreign countries were backed up by international cooperation agreements between Nigeria on the one hand and the Republic of Benin and Togo for CEB (Communaute Electrique Du Benin) and Niger Republic for NIGELEC (Societe Nigerine D’electricite)

“As a matter of fact, wheeling of electricity to these countries was being channelled through the network of the Transmission Company of Nigeria(TCN) as there is no dedicated network between the private generating companies and the foreign countries.

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“Prior to these directives and upon the commencement of the Transitional Electricity Market in February 2015, the TCN that received the proceeds of the sale of electricity to international customers began crediting the international customers’ receipts to the account of NBET for payment to GenCos while NBET in turn shares among all the GenCos in a transparent process and in accordance with the approved waterfall.

“The former President’s directive reinforced the earlier directive from the Federal Ministry of Power, Works and Housing to the TCN vide a letter referenced FMP/OPS/360/I dated September 7, 2016, but, despite these, Nigerians were made to purchase expensive energy by selling the cheapest ones to the foreign countries.”

Another source privy to the “secret deals” said: “The quarterly reports released by the Nigerian Electricity Regulatory Commission for 2022 reveal how a few generating companies under the disguise of selling electricity to the international customers are milking Forex at the expense of other GenCos.

“The sales by the few GenCos are without any transparent procurement process known to any Nigerian Law.

“In 2022, Q 2 alone, the errant GenCos reaped in $7.98 million while $8.94 million invoice was exchanged between them for Q 4 of 2022.

“Part of the energy being sold to the international customers by Nigeria came from the Hydro Electric Generating Companies which is the cheapest cost of energy in Nigeria when compared with the thermal generating plants. The cost of energy from the latter is about six times the cost of the former.

“Prior to when the few GenCos cornered the forex from the international customers, inflows from such transactions were always shared among the entire GenCos in the portfolio of NBET to ameliorate the challenges faced by them in sourcing for foreign exchange.”

‘GenCos sell cheap power to neighbouring countries’

The Nation

Related Topics:Discos electricity GenCos

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BREAKING: FEC proposes N47.9 trillion budget for 2025 fiscal year

Published

12 hours ago

November 14, 2024

Trends Admin

BREAKING: FEC proposes N47.9 trillion budget for 2025 fiscal year

The federal government has unveiled a proposed budget of N47.9 trillion for the 2025 fiscal year.

Atiku Bagudu, Minister of Budget and Economic Planning, disclosed this to journalists on Thursday following the Federal Executive Council (FEC) meeting chaired by President Bola Tinubu.

Bagudu revealed that the council had approved the Medium-Term Expenditure Framework (MTEF) for 2025-2027.

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According to the minister, the government has pegged the crude oil benchmark at $75 per barrel, with an oil production target of 2.06 million barrels per day (bpd).

The budget also sets the exchange rate at N1,400 per dollar and aims for a gross domestic product (GDP) growth rate of 6.4%.

BREAKING: FEC proposes N47.9 trillion budget for 2025 fiscal year

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EFCC arrests ex-NCMB boss over $35m energy project fraud

Published

12 hours ago

November 14, 2024

Trends Admin

EFCC arrests ex-NCMB boss over $35m energy project fraud

The Economic and Financial Crimes Commission (EFCC) told FIJ that they have arrested Timber Wabote, the former executive secretary of the Nigerian Content Development and Monitoring Board (NCMB), on the grounds of a failed $35 million Bayelsa refinery project fraud.

Dele Oyewale, the EFCC’s spokesperson, confirmed this to FIJ on Thursday.

“It is true,” Oyewale responded to FIJ’s inquiries.

Wabote is accused of misappropriating public funds for a refinery project that should have improved local energy production.

Vanguard reported that the NCDMB under Wabote paid $35 million to support the development of energy infrastructure in the Brass Local Government Area of Bayelsa, yet there was nothing to show for it.

The EFCC picked Wabote up following the arrest of Akintoye Adeoye Akindele, the Managing Director of Atlantic International Refinery and Petrochemical Limited, for alleged misappropriation, money laundering and diversion of $35 million in public funds.

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“NCDMB under the watch of Wabote allegedly paid the $35 million to Akindele to build a 2,000 barrel per day (BPD), refinery, jetty, gas plant, power plant, data centre and tank farm at Brass free trade zone (FTZ), Okpoama Community in Brass LGA of Bayelsa State,” a source with the EFCC had explained.

Since December 2020 when the payments were made, Akindele abandoned the project with little or nothing to show for the huge sum he received.

Preliminary investigations showed that Wabote’s NCDMB financed 17 different projects, including the 2,000 BPD refinery in Brass LGA.

There has been a series of public fund misappropriation cases in the energy sector in recent times.

FIJ earlier reported that members of the House of Representatives summoned three ministers to defend how over $2 billion was spent on renewable energy with not much to show for it.

A recent FIJ report also recently detailed how residents of Yenagoa, the capital of Bayelsa, have not had power in their homes since July due to the vandalisation of the Ahoada-Yenagoa transmission towers caused by unidentified persons.

The Bayelsa state government told FIJ it was the federal government’s responsibility to provide electricity for residents. The state has no renewable energy options reliable enough to power its capital despite the multi-million-dollar NCMB energy project.

Transparency in the energy sector has become necessary at a time when Nigerians have suffered power instability due to frequent grid collapses.

EFCC arrests ex-NCMB boss over $35m energy project fraud

metro

Court adjourns Yahaya Bello’s trial till Nov 27

Published

12 hours ago

November 14, 2024

Trends Admin

Yahaya Bello

Court adjourns Yahaya Bello’s trial till Nov 27

The Economic and Financial Crimes Commission (EFCC) has requested an adjournment in the new case against the immediate past Governor of Kogi State, Yahaya Bello, stating that the 30-day window for the previously issued summons is still active.

The commission has granted administrative bail to his co-defendants, Umar Oricha and Abdulsalami Hudu, and asked the court for an extension of time for Bello to appear.

At the resumed hearing before Justice Maryann Anenih of the Federal Capital Territory High Court, Abuja, EFCC Counsel Jamiu Agoro noted that the court’s order from October 3rd had not yet expired.

“In that wise, we feel it will not be appropriate for us to take proceedings while that 30 days is still running. So we have discussed and agreed to come back on the 27th day of November, 2024, my lord,” he told the court.

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He also mentioned that the previously set date of November 20th was not convenient for the prosecution counsels.

Counsel to the second defendant, Aliyu Saiki, SAN, confirmed that his client had been granted administrative bail by the prosecution and had no objection to the adjournment request. The third defendant’s counsel, ZE Abass, concurred.

The prosecution counsel also requested the court to allow the notice of hearing to be pasted on the last known address of the first defendant.

After hearing from all counsels, the judge granted the EFCC’s application for adjournment and the issuance of the hearing notice.

“I have considered the application for adjournment by the complainant and issuance of hearing notice and the submission by the second and third defendants. The application is granted,” she said.

Justice Anenih then adjourned the case to November 27th for arraignment.

The former governor, alongside Umar Oricha and Abdulsalami Hudu, are being prosecuted as 1st to 3rd defendants, respectively, in a fresh 16-count charge instituted against them by the EFCC.