“Government has not improved on the wheeling capacity of TCN (Transmission Company of Nigeria) as provided in the agreement. The government has not given them cost reflective tariff as provided in the agreement.”
Business
Power generation drops, Discos, FG battle for control
The planned takeover of three power distribution companies by Fidelity Bank and the restructuring of two others by the Federal Government have led to an intense battle between the Discos and the government.
The takeover of the three Discos by Fidelity Bank is being backed by the Federal Government through the Bureau for Public Enterprise.
This came as findings show that Discos have continued to launch fresh legal battles with a view to preventing their takeover by the government and the bank.
However, industry stakeholders are divided over the development with both parties receiving commendations and condemnations from power sector experts.
While industry stakeholders gave diverse views on the development, it was observed on Monday that power generation on the national grid dipped by about 141.3 megawatts when compared to what was recorded on the grid on July 9, 2022.
Figures obtained by our correspondent from the Federal Ministry of Power showed that power generation rose to a peak of 3,992.6MW on July 9, 2022, but the peak generation on July 10, 2022 fell to 3,908.8MW.
This dropped further on Monday, as data from the FMP showed that power generation on the grid as at 6am on July 11, 2022, was 3,851.31MW, indicating a drop of 141.3MW when compared to figures posted on July 9, 2022.
Meanwhile, industry experts have raised diverse concerns over the planned takeover and restructuring of some power distribution companies as recently announced by the Federal Government.
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Last Tuesday the Federal Government announced the planned takeover of Kano, Benin and Kaduna electricity distribution companies by Fidelity Bank Plc after the bank initiated action to take over the boards of the three Discos.
It also announced through the Bureau of Public Enterprises that with the takeover of Ibadan Disco by the Asset Management Corporation of Nigeria, the BPE had obtained approval from NERC to appoint an interim managing director for the distressed power firm.
The government had further stated in last Tuesday’s restructuring notice that it was restructuring the management and board of Port Harcourt Disco to forestall the imminent insolvency of the utility. The notice was signed by the Director-General, BPE, Alex Okoh; and Executive Chairman, NERC, Sanusi Garba.
But in reaction to the announcement, the receiver/manager’s nominee of Integrated Energy Distribution and Marketing Company had argued on Wednesday that it was the legal and beneficial owner of 60 per cent (controlling and managing) shareholding interests in the Ibadan Electricity Distribution Company.
Also, the management of the Benin Electricity Distribution Company Plc had argued on Wednesday that there was no legal basis for the takeover of the company following the purported activation of the call on its collateralised shares by Fidelity Bank.
Commenting on the development on Monday, a member of the National Technical Investigative Panel on Power System Collapses (June 2013), who doubles as the President, Nigeria Consumer Protection Network, Kunle Olubiyo, told our correspondent that the move by the government should be commended.
He explained that ordinarily, the licensees had a 10-years tenure, as the mid-term review ought to have taken place five years into the post-privatisation exercise.
“This was not done across board,” Olubiyo stated.
He added, “The open book review, service level agreement, mass metering, investment in network improvement and overhauled, governance structure, the so-called (Discos) failed in all benchmarked global best practices and Key performance indicators.”
“As against investments in the immediate, medium and long term, what we saw was rent-seeking, profiteering and lack of fiscal responsibility and the much-needed discipline.”
Olubiyo noted that no sector could survive where there were no sanctions for impunity and no consequences for infractions.
“In the prevailing circumstances, we are on the same page with relevant stakeholders in the present efforts to clean up the mess and free our economy held by its jugular by the non-performing utilities,” the NCPN president stated.
In his submission on the matter, another power sector expert, Prof. Yemi Oke, observed that in 2009, the defunct Power Holding Company of Nigeria generated about 3,800 megawatts of electricity.
“Today, after all the noise about privatisation, the generation is 2,400MW,” he stated.
Oke added, “In 2009 NEPA (National Electric Power Authority)/ PHCN had only one MD/CEO (managing director/chief executive officer) managing the sector.
“Today and post-privatisation there are over 25 MDs/CEOs helping themselves from the revenue accruing from a paltry generation of 2,400MW. And they are Crying about illiquidity.
“Where will they have the money to service this inefficiency? 25 MDs/CEOs and over 100 executive directors etc, depending on 2,400MW. This is the problem: jobs for the ‘boys’! We’re in a deep, serious crisis as far of energy sector is concerned (petroleum, gas and power)!”
The professor stated that at least five Nigerian banks might collapse under heavy burdens of power-sector acquisition financing/lending.
He said three banks had gone already, adding that “one just revealed itself by this move.”
Oke added, “80 per cent of the Discos are technically insolvent, hence the problems of the power sector may continue. We will continue to experience an average of five to six national grid/system collapses per annum.”
The energy expert, however took a swipe at the BPE, describing the agency as incompetent in the handling of the power sector.
He said, “It suits their incompetence and ignorance of what they profess they know how to do best that Nigeria and Nigerians are worst-off in their post-power sector privatisation.
“They should be happier that a lot more industries have closed or been shut-down due to their breach of national confidence reposed in them. At least, no electricity to power industries.
“BPE should recall that this is a privatisation designed, midwifed and delivered by the BPE. Let them sell the remaining NDPHC (Niger Delta Power Holding Company) assets for ‘political patronages’ as usual. They lack moral basis to talk down on Discos and their owners.”
Also speaking on the matter, a public private partnership consultant, who took part in process for the privatisation of Nigeria’s power sector, Joe Tsavsar, argued that the government had not fulfilled most of its part in the agreements reached with power firms since the sector was handed over to private investors in November 2013.
He insisted that the government had not performed its obligations to the investors and must share in the blame of poor performance by operators in the industry.
Tsavsar said, “Government has not given the so called Discos the MW of electricity as provided in the agreement. The Discos can’t give what they are not given. Government has not given the Gencos (generation companies) gas to produce power as provided in the agreement.
Business
FG revokes N32bn metering contract, vows to sell five DisCos
FG revokes N32bn metering contract, vows to sell five DisCos
President Bola Tinubu has ordered the revocation of a N32 billion ($200m) metering contract awarded by the Federal Government since 2021 for non-performance.
Minister of Power Adebayo Adelabu disclosed this and hinted of plans to sell off five electricity Distribution Companies (DisCos) over persistent blackout.
Adelabu spoke on Monday while hosting members of the Senate Committee on Power in his Abuja office.
The minister said the Federal Government had mobilised a company named Messr Zigglass with $200 million (N32 billion) to supply three million meters, but that the firm had failed to deliver.
“If you held N32 billion for these years, where is the interest?” he asked.
According to him, President Tinubu has directed that the contract be revoked.
The government, he said, would bridge the current eight million metering gap in the next four to five years.
The minister also said the funding would be coming from a seed capital of N100 billion and N75 billion.
He added that the Nigerian Sovereign Investment Authority (NSIA) would come to the aid of the ministry with the funds.
The sale of the five DisCos to reputable technical power operators, he said, would be completed within three months.
He told the committee that tough decisions on the DisCos had become necessary because the entire Nigerian Electricity Supply Industry (NESI) failed due to the poor performance of the distribution companies.
The minister said the ministry would prevail on the Nigerian Electricity Regulatory Commission (NERC) to revoke underperforming licences and change the management boards of the DisCos if necessary.
Adelabu said, “On distribution, very soon you will see that tough decisions will be taken on the DisCos. They are the last lap of the sector. If they don’t perform, the entire sector is not performing.
“The entire ministry is not performing. We have put pressure on NERC, which is their regulator to make sure they raise the bar on regulation activities.
“If they have to withdraw licences for non-performance, why not? If they have to change the board of management, why not?
“And all the DisCos that are still under AMCON and banks; within the next three months, they must be sold to technical power operators with good reputations in utility management.
“We can no longer afford AMCON to run our DisCos. We can no longer afford the banks to run our DisCos. This is a technical industry and it must be run by technical experts.”
He listed those affected as Abuja Electricity Distribution Company (AEDC) under the management of the United Bank of Africa (UBA), Benin Electricity Distribution Company (BEDC), Kaduna Electricity Distribution Company and Kano Electricity Distribution Company managed by Fidelity Bank; Ibadan Electricity Distribution Company (IEDC) is under the AMCON management.
Investors hold 60 per cent of shares in the DisCos. The Federal Government holds the remaining 40 per cent.
Blackout has persisted in most states with DisCos blaming low allocation from the national grid as well as gas shortage to generating companies (GenCos) as the causes.
The minister said that the energy distribution assets are technical and should be managed by experts.
According to him, the Ibadan DisCo is too large for one company to manage.
Responding to the decision to resell the DisCos, a member of the committee, Senator Isah Jibrin, alleged that some of the operators have stripped the assets of the DisCos they took over in 2013.
He insisted that the operators of any revoked DisCo must be compelled to fix the assets as they were prior to handover.
Adelabu blamed issues in the industry on uncompleted projects and appealed to the committee to approve funds for the completion of over 120 projects across the country.
Business
Naira depreciates against dollar as speculators reportedly hoard
Naira depreciates against dollar as speculators reportedly hoard
The naira fell in value against the US dollar to N1,234 in the official foreign exchange market on Monday, according to statistics from the FMDQ securities exchange.
The currency rate indicates that the naira decreased by N65, or 5.26 percent, from N1,169.99/$1 recorded on Friday.
The local currency had strengthened to about N1,072.74 on Wednesday, as traders expected the naira will trade below N1,000/$1 for the first time.
However, the latest drop appears to coincide with the remarks of the apex bank Governor, Yemi Cardoso, who stated that the intent of the bank was not to defend the Naira, when asked about the sudden drop in external reserves.
Nigeria’s foreign exchange reserves have maintained a one-month dip streak. The latest figures from the Central Bank of Nigeria show the external reserves reached a new low of $32.1bn on April 18, 2024. The reserves dropped by $2.35bn in 31 days, from $34.45bn on March 18, 2024.
But the CBN governor at the International Monetary Fund/World Bank Spring Meetings stated that the bank would refrain from intervening in the exchange unless unusual circumstances arose, stressing that the recent slight shift in reserves was unrelated to defending the naira.
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He said, “I want to make this as clear as possible, it is not in our intention to defend the naira. and as much I have read in the recent few days, some opinions with respect to what is happening with our reserves and if the central bank is defending the naira.”
The national currency had slumped badly in the forex market in the weeks preceding the clampdown on Binance, exchanging for as much as N1,950 in mid-February.
Observers blamed its earlier misfortune on alleged manipulation of the market by Binance. However, some stakeholders have accused the new crypto exchange platforms BYBIT and BITGET for the latest slip.
Analysts suggested that the naira experienced a depreciation over the span of six months from July 2023 to January 2024, particularly evident in the black market following the disbursement of funds by the FAAC to federal, state, and local government authorities.
The summary of the forex transaction showed that the intra-day high depreciated, closing at N1,295 per dollar. The intra-day low also reduced to N1,051/$. While the total daily turnover dropped slightly to $110.17m on Monday.
At the parallel market, currency traders sold the dollar between the rate of N1,250 and N1,270 from N1,154 recorded last Friday.
Bureau de Change operators who spoke to our correspondent said the reason for the new increase in dollar rate was due to market forces, adding they were unsure if there would be more increase or reduction before the end of the week.
The naira’s surge since late March, which had made it the best-performing currency in the world, came to a stop on Sunday when it had its first weekly decline in several weeks on the parallel market.
A BDC operator, Abubakar Taura said, “We sold the dollar today between the rate of N1,50 and N1,270 and it is a bit surprising because we don’t even know the real reason but that is the market, one day there will be profit and another day we make losses.”
Naira depreciates against dollar as speculators reportedly hoard
Business
Olusegun Alebiosu named acting Chief Executive of FBN
Olusegun Alebiosu named acting Chief Executive of FBN
FBN Holdings Plc has named Mr Olusegun Alebiosu as acting Chief Executive of the First Bank of Nigeria Limited (FirstBank), its flagship subsidiary.
This is coming after the recent resignation of the bank’s Managing Director/Chief Executive, Dr Adesola Adeduntan.
This is contained in a statement to the Nigerian Stock Exchange, signed by the holdings’ acting Company Secretary, Adewale Arogundade.
It said the appointment taking immediate effect would be subject to the approval of the Central Bank of Nigeria (CBN).
The statement added that the announcement was in accordance with the Rulebook of The Exchange (Issuers’ Rules), which required that the Nigerian Exchange Limited and the investing public be duly notified of such development.
Alebiosu was an Executive Director/Chief Risk Officer who jointly led the transformation of FirstBank over the past eight years, and was an integral member of the team under the previous CEO’s leadership.
He joined FirstBank in 2016 and has over three decades of banking experience.
“The Board of Directors expressed gratitude to Adeduntan for his exemplary leadership in the last nine years during which he superintended the transformation and growth of the bank and wish him well in his future endeavours,” the statement added.
The new acting First Bank CEO commenced his professional career in 1991 with Oceanic Bank Plc (now EcoBank Plc).
Prior to joining FirstBank in 2016, he had served as Chief Risk Officer at Coronation Merchant Bank Limited, Chief Credit Risk Officer at African Development Bank Group, and Group Head, Credit Policy and Deputy Chief Credit Risk Officer at United Bank for Africa Plc.
He is an alumnus of Harvard School of Government and holds a bachelor’s degree in Industrial Relations and Personnel Management.
Alebiosu also obtained a master’s degree in International Law and Diplomacy from the University of Lagos and holds a master’s degree in Development Studies from the London School of Economics and Political Science.
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