BY AKUDORO GLORIA
Stakeholders within the power sector have expressed unanimous support for the Nigerian Bulk Electricity Trading Plc (NBET) request for license renewal, highlighting the organization’s significant contributions to the market’s development.
NBET, a pivotal player in the nation’s power sector, is approaching a critical juncture with its three-year operating license set to expire on November 21, 2024. As a Federal Government owned public liability company, the Bureau of Public Enterprises and Ministry of Finance Incorporated are its shareholders with 80 per cent and 20 per cent stakes respectively.
At the public hearing on NBET’s application for a five-year licence renewal organised by the Nigerian Electricity Regulatory Commission, (NERC), in Abuja on Thursday, stakeholders argued that without a vesting contract backed by NBET it would be difficult to secure financing from banks.
Within the proposed timeframe, NBET seeks to enhance the rapid growth of the market, and create a diversified trading environment, by promoting bilateral trading between GenCos/Independent Power Producers (IPPs) and Commercial/Industrial Customers through an automated energy trading platform/exchange developed and deployed for the sales of electricity with multiple energy broker playing.
Opening proceedings at the hearing, NERC’s Commissioner for Lincensing and Rates, Dafe Akpeneye, said the power landscape is changing significantly in the past one year following the enactment of the Electricity Act 2023.
He observed that with the sector moving towards bilateral contracting that would have no government input, NBET needs to redefine its role in the Nigerian Electricity Supply Industry (NESI) .
Akpeneye explained, “We are moving to bilateral contracting. We now have cost-reflective tariffs for a certain band of customers. And with that as well, we can see that there’s been vast improvement in supply.
“People call us from time to time to tell us that supply has improved. And the next move now is to move to bilateral contracting, whereby the excuse that the government is standing in our way, or government is holding back, will no longer be there. If Mainstream enters into a contract with a utility, those are two private parties, and they will bear the full consequences of the terms of their commercial transactions.”
Also speaking, the Ag. Managing Director, Mr. Johnson Akinnawo, expressed support for the renewal of NBET licence for another five years, saying that the bulk electricity trader has in the past 13 years become the bridge between operators in the sector.
“NBET has transparently administered a contracts portfolio with an annual trading volume in excess of $2 billion, pointing out that NBET has made considerable progress in its quest to achieve its mission of being an effective and efficient catalyst for private sector investment in the electricity industry in Nigeria.
“NBET has done this by executing power purchase agreements and vesting contracts that paved the way for the privatisation of the former PHCN companies”, he added.
Speaking in support of NBET operating licence renewal, the Managing Director/CEO, Azura Power West Africa Limited, Plant, Mr. Edu Okeke, noted that as the company is having a 20-year power purchase agreement with NBET, that it was important that the agency remains in the sector as its renewal would boost investors’ confidence in the Nigerian power sector.
Okeke advocated for the scrapping of periodic licences for operators, saying it does not happen in other sectors and would be difficult for any of the operators that has NBET as customers to secure loans for periods longer than NBET’s licence duration.
In his remarks, the Market Operator, Transmission Company of Nigeria, Ali Ahmad said the NBET licence renewal would maintain stability in the supply chain.
Recalled that at the last week of August, NBET’s Ag. MD/CEO visited Ministry of Finance Incorporated (MOFI) on the organization’s current strategic projects, power sector issues and its value proposition and future plans. The Ministry in turn, pledged commitment to supporting NBET to achieve its mandate.