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FG Justifies Placement of $350m Bulk Trader’s Fund Under NSIA

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IMAGE: Dr. Ngozi Okonjo-Iwealal, Minister of Finance »



Story:  Chineme Okafor
The federal government yesterday explained why it decided to assign a certain $350 million financial stock of the Nigerian Bulk Electricity Trading Company (NBET) Plc to the Nigerian Sovereign Investment Authority (NSIA) to manage on behalf of the NBET.

The Minister of Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, stated in Abuja that the decision was partly based on the need to efficiently manage the $350 million which NBET got from the Eurobond proceeds and also keep it productive rather than dormant.

Okonjo-Iweala, who is the Chairman of the board of the NBET said this during her maiden working visit to the corporate office of the NBET in Abuja alongside other board members of the company.

She also presided over a meeting of the board of the company that is equally known as the bulk trader.
Okonjo-Iweala said: “We are delighted that the new agency has found its feet and we will be here for regular board meetings where we shall consider very serious issues. The bulk trader has been very well resourced to be able to carry out its intermediary role in the power sector. The bulk trader in addition to the resources it had from the budget has also received $350 million as a liquidity facility from the Eurobond, which is being managed for it by the sovereign wealth fund.

“The decision is that, most of the Eurobond money was taken to support the power sector, now when you think about it, this liquidity facility has to be managed in such a way that we are also able to repay the loan. So you need to think about the best way to invest this money, you can’t just have it sitting in the central bank, which was what we were doing initially because it will earn next to nothing.”So, the best opportunity was to give it to the premier investment corporation of the government to manage so that we can get some decent returns that will enable us to defray the interest cost of the repayment of the facility, even if it’s not all at least it will more than it will get sitting elsewhere. The facility is fresh injection from the Eurobond and we gave it to the sovereign wealth fund to manage,” the minister clarified.

While speaking on the recent activities of the NBET, Okonjo-Iweala said: “The bulk trader has been working on a green field project - the Azura power and has been doing very innovative power purchase agreements and putting in place innovative ways to move the power sector forward.

“We have very experienced board members, and we will talk about normal policies like the HR policy, compensation and other policy issues.

“I commend the NBET for the ability to craft the power purchase agreements that will become a template for what we do in the future; I am impressed with the organisation of the agency so far.
The bulk trader has set itself up to show that the model of the power sector reform Nigeria is pursuing can work,” she added.

The Managing Director of NBET, Rumundaka Wonodi, similarly disclosed that the agency would in the course of its board meeting seek the approval of the board to formalise some of its working instruments.

He noted that a two-year audited financial account of the NBET would be presented to the board for scrutiny, adding that it seeks to completely get off with its mandatory trading obligations in the Nigerian Electricity Supply Industry (NESI) with the board’s approval of the instruments.
“The agency looks forward to the guidance of the board to formalise things like finance manual, HR (human resource) manual and things that will get the agency in a position to get the trading and portfolio management once we get into transitional electricity market.

We will be presenting to the audit committee our statement of account for the past two years, because one of the things that the company plans to do is to make sure that it stands on the good side of the law,” Wonodi stated.

Article Credit: ThisDay Newspaper

Updated 5 Years ago

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Tags:     Nigerian Bulk Electricity Trading Company (NBET)     Managing Director of NBET     Rumundaka Wonodi     Dr. Ngozi Okonjo-Iweala     Chairman of the board of the NBET