Discos’ huge debts threaten NBET’s N701bn power fund

There are strong indications that the N701 billion payment assurance facility secured by the Nigerian Bulk Electricity Trading Plc (NBET) for power generation companies (Gencos) in Nigeria may not last up to the 24 months disbursement timeline it was originally planned for. This is because of the poor financial remittances of the 11 electricity distribution companies (Discos) in the country.

The fund, which was established in 2017, was to be disbursed till 2019,

THISDAY gathered at the weekend that following the consistent drop in the monthly remittances of the Discos to the NBET for electricity sold to them, NBET might have been forced to take more from its N701 billion payment facility to ensure it met the 80 per cent payments to the Gencos. This, sources in the industry explained to the paper, constituted a real threat to the 24-month disbursement window of the facility. Similarly, the NBET, it was learnt, had documented this threat and presented the likely scenario – that is, how long the facility could take the sector if the poor remittance levels of the Discos continued – to relevant authorities of the federal government for actions.

In December 2017, NBET disclosed that the remittance performances of the Discos dropped to an all-time low of 8.33 per cent, as against the 100 per cent they were supposed to do. It explained then that five Discos, comprising Ikeja, Kano, Kaduna, Yola, and Jos, did not remit any money to it, and that it got just N4.47 billion out of the N50.21 billion December invoice it sent to the Discos. NBET also stated then that while the total financial shortfall for the month was N49.766 billion, it still paid the Gencos up to 80 per cent of their invoices with support from the N701 billion facility.

Again in January 2018, NBET stated that just four of the Discos – Abuja, Enugu, Jos, and Yola – paid parts of their invoices to it. It said out of N44.85 billion invoice it sent to the Discos in January, only N6.08 billion was received from the four Discos while seven others paid nothing. The remittance for January, it noted, represented 13.58 per cent of the invoice.

However, sources in NBET explained to THISDAY that if the poor Discos’ remittances continued, the N701 billion may be depleted by September 2018, some four months ahead of the 2019 disbursement duration. One of the sources even told the paper that a term-sheet had been prepared by NBET in this regard, and shared with the government. He said it was expected that this would lead to some pre-emptive measures from the government.

NBET was supposed to have started disbursing the N701 billion facility from January 2017. Drawdowns according to the term-sheet of the facility would be made on a monthly basis over a period of 24 months.
The facility, from its scope, would be used to assure payments for the energy delivered by the Gencos, gas companies for gas supplied and transported to them, as well as certain specific and critical creditor obligations of the Gencos.

In a related development, THISDAY gathered that the management crisis rocking NBET had simply refused to go away, with a religious slant now introduced into the internal battle for supremacy between the Managing Director of NBET, Dr. Marilyn Amobi, and two of her subordinates – Mr. Waziri Bintube and Mr. Abdullahi Sambo – both of whom have reportedly been dismissed or suspended from the services of the company.

According to petition letters written to NBET by two Muslim groups – the Muslim Media Watch Group and Abuja Muslim Forum –which was obtained by THISDAY, Amobi was accused of injustice and religious victimisation of Bintube and Sambo in the company. The groups accused NBET under Amobi of religious intolerance and unconstitutionally depriving both officials of their salaries and emoluments, which they said had been in arrears.

In their petitions, they claimed Amobi had continued to exhibit acts of executive lawlessness, despite interventions from the Ministry of Power, Works and Housing in the management struggle between her and the duo.
The petitions were signed by Nasir Balogun, who is the national secretary of the Muslim Media Watch Group, and president of the Abuja Muslim Forum, L. J. Ahmad.

It was gathered that Amobi might have called the attention of the Sultan of Sokoto, Alhaji Muhammad Sa’ad Abubakar, and Emir of Kano, Muhammadu Sanusi II, to the development, being that they are both president and vice president of the Nigerian Supreme Council for Islamic Affairs (NSCIA), respectively.

Officials of NBET, who are close to the development, however, told THISDAY, on condition of anonymity, that the issues relating to Bintube and Sambo bordered on basic organisational discipline and respect for rules governing the actions of government officials. They explained that both officials left their duty posts when the office of the Accountant-General of the Federation seconded two of its officials to NBET to help it attain a self-accounting status. That exercise, they noted, required some management reshuffling and Bintube and Sambo were, thus, moved to head new departments. This, the NBET officials alleged, did not go down well with the two officers and they subsequently left their duty posts for up to six months in disregard of both the government and NBET’s rules of engagement.

Accordingly, both officers rejected their appointments and, reportedly, petitioned a non-existent board of NBET, with the insistence that Amobi had no right to redeploy them to new departments.

When THISDAY called the Permanent Secretary in the ministry of power, Mr. Louis Edozien, for comments on the development in one of the agencies under his ministry, and especially on the fact that NBET does not have a board yet to sit over the issue, as expected, he simply referred the matter to the media unit of the ministry, saying the unit should be able to handle the request.

Further, the paper placed a call to Mr. Hakeem Bello, who is Senior Special Assistant to the Minister of Power, Works and Housing, Mr. Babatunde Fashola, to clarify the situation, considering that the Muslim groups alleged that Fashola had directed Amobi to take back the two officials. But Bello stated that he was not aware of such petition or the minister’s directive. He, however, promised to investigate the matter and revert back to resolve the queries. Bello had yet to respond at the time of filing this report.