Liquidity crisis, regulatory issues top hurdles for taskforce on power
Can the ministerial taskforce on sustainable power ensures light at the end of the tunnel? Recently, the Federal Government inaugurated a Ministerial Taskforce on Power as a way of achieving the fight for increased and sustainable power supply in the country.
The Minister of Power, Engr. Sale Mamman who inaugurated the Taskforce in Abuja said setting up of the team became necessary as a result of the Federal Government’s plan to accelerate the pace of reforms in the sector and increase power output and availability in the short and long term.
The Taskforce comprising about 22 members is chaired by Professor Abubakar Sani Sambo. He was a former Director General of the Energy Commission of Nigeria (ECN).
What to expect in 24 months
In presenting the Terms of Reference (ToR) of the Taskforce, the Ministry of Power said it will serve as an Advisory Team on Policies and Innovative Technologies for the 24 months it will operate beginning from this month.
The Taskforce is also saddled with the responsibility of developing, planning and driving forward the reform plan of the Federal Government in the power sector. According to the ministry, members of the Taskforce were carefully selected and are people who are conversant with issues in the power sector.
Accepting the role and declaring their commitment, Prof. Sambo said during the inauguration that his members will not fail the Federal Government on the confidence reposed on them.
Daily Trust Saturday reports that the Nigerian power sector presently needs intervention to ensure stable operation. One of the major hurdles the Taskforce will be confronting is the issue of poor liquidity in the Nigerian Electricity Market (NEM). There is said to be at least N1.3trillion shortfall following non reflective tariffs, lack of payment of electricity bills by Ministries, Departments and Agencies (MDAs) of the federal government.
Another hurdle is that of regulatory issue. The Nigerian Electricity Regulatory Commission (NERC) had sanctioned eight electricity Distributions Companies (DisCos) in October 2019 and had asked them to defend their operations or risk the cancellation of their licences in December.
By December 9, 2019, NERC said six DisCos scaled the hurdles as they met a 34 percent Minimal Remittance Order (MRO) for electricity revenue remittance to the Nigerian Bulk Electricity trading Plc (NBET).
The issue of non-remittance, experts say is also part of a wider problem of market indiscipline in the electricity sector. This is something the committee will be advising the Minister on in its strive to reorganize the sector.
Ministerial reform begins!
About a week after the minister inaugurated the Taskforce, Daily Trust Saturday reports that the reform he talked of has kicked off.
The Minister, Engr. Mamman directed the immediate stepping down of the Managing Director/ CEO of the Nigerian Bulk Electricity Trading Plc (NBET), Dr. Marilyn Amobi. He said the actions were in continuation of the re-organisation and sanitization in the ministry.
He also directed the immediate and indefinite suspension of the Managing Director of the Rural Electrification Agency (REA), Damilola Ogunbiyi over some apparent infractions. Ogunbiyi is to hand over to the next most senior officer in the Agency.
Citing reasons for the stepping down directive of the NBET boss, the minister in a statement said “In view of this, the minister has also directed the Constitution of a 5-man investigative committee to look into the myriads of complaints against the MD/CEO (of NBET) with the view of restoring sanity in the management of the company.”
NBET was incorporated on July 29, 2010 and serves as a special purpose vehicle to buy electricity from the Generation Companies (GenCos) through the Power Purchase Agreements (PPAs) and sell to the Distribution Companies (DisCos) through vesting contracts.
It is completely under the power sector with a license from the Nigerian Electricity Regulatory Commission (NERC) to operate. However, due its financial intervention role, the Chairperson of the board has remained the Minister of Finance.
Dr. Amobi assumed office in August 2016 and ought to have five year tenure. She is the second head of the intermediary utility firm after the pioneer head, Mr. Rumundaka Wonodi, left after spending over five years.
As part of the myriads of complaints against the NBET boss, in October 2019, Daily Trust Saturday exclusively investigated a stalemate at NBET after Amobi defied the power ministry to sack officials over “unfounded issues.”
The ministry raised a committee in 2018 and recommendations were made including the reinstatement of two senior staff of the agency after she “unilaterally” sanctioned them. But over 18 months after, she refused and has not allowed them access to their offices.
On November 25, 2019, Daily Trust Saturday again exclusively investigated ‘padding’ scandal at NBET under Amobi over questionable budgetary allocations software and rent, among others. When asked to respond, Amobi’s corporate communication office said there was approval for the projects, one of which is software procured for nearly N1billion.
Operators of the Generation Companies (GenCos) also have issues with NBET under Amobi.
Daily Trust Saturday had recently reported that Dr Joy Ogaji, the Executive Secretary of the Association of Power Generation Companies (APGC) complained of NBET pressuring CEOs of GenCos to sign that she (NBET) will take over payment of gas supply from the private companies at a 0.75 percent fee.
APGC said it was illegal and refused but the agency was said to have threatened to cut payment of their month energy invoice if they fail to agree. And that the GenCos may not access a fresh N600 billion CBN loan if they don’t comply.
Recently, some aggrieved staff told Daily Trust Saturday how the embattled NBET boss assaulted some of them and turned operatives of the Department of State Security Service (DSS) on them.
For the REA, Mamman also directed an immediate investigation into its activities towards repositioning it for better service delivery.
Ogunbiyi occupies a tripartite since she was brought in under former minister, Babatunde Fashola. She was the coordinator of the former minister’s pet work, Power Sector Recovery Programme (PSRP), the Senior Adviser in the office of Vice President Yemi Osinbajo on Power, and the MD of REA. There are also complaints of high cost project contracts at the agency.
Taskforce members
The Vice Chairman and Executive Secretary of the Taskforce is Lateef Olabamiji. The members are Mr. Haruna Ladan, the Deputy Director, Appointment, Promotion and Discipline in the Ministry. He will also serve as the Secretary.
There is the former Deputy Managing Director (DMD) of the Transmission Company of Nigeria (TCN), Engr. Abubakar Atiku Tambuwal. Engr. Atiku was to serve as the MD of TCN following the exit of Manitoba Hydro International Nigeria Limited (MHINL) after they had done a contract management for nearly four years.
Atiku and his Nigerian team served for about eight months between July 2016 and February 2017 when the federal government appointment Mr U.G. Mohammed as the Interim MD of TCN. Mohammed was later appointed as MD of TCN in 2018.
Another member of the Taskforce is Engr. Faruk Yabo Yusuf who is the acting Director (Renewable and Rural Power Access Dept.) in the ministry. He has supervised and executed various mini grid renewable energy projects since 2017.
Dr. Vincent Dogo is an expert in the field of Power Engineering and Telecommunication Systems with particular focus on generation and transmission. The consultant has trained a lot power telecommunication staff at TCN.
Engr. Emmanuel Ajayi is the Director, Energy Resources Department (ERD) in the ministry.
Mahmud Tukur is the Managing Director/CEO at Eterna Oil & Gas PLC. He brings his expertise in the oil gas sector, especially on Gas-to-Power, accounting for 70 percent component of Nigeria’s power generation.
Prof. Abubakar Jika Jiddere is a professor of political science at the Bayero University, Kano. His area of research interest is in International Nuclear Politics and Diplomacy.
Engr. Tunji Ariyomo is a Harvard and Sheffield trained engineer and was a gubernatorial aspirant on the platform of the All Progressives Congress in Ondo State.
Other members of the taskforce are Sanusi Muktar Bichi, Dr. Sam Uche Okoro, Goodluck Enimakpokop, Chidi Adabanya, and Musa Usman Yola.
The rest are, Barrister Shehu Inuwa, Prof. S.S Adamu, Ivy Joyce Adi-Elekwa, Abba Aliyu, and Isa Ado Maidoya, Dr. Haruna Musa, and Dr. Nurain Hassan Ibrahim.
The Taskforce is also saddled with the responsibility of developing, planning and driving forward the reform plan of the Federal Government in the power sector. According to the ministry, members of the Taskforce were carefully selected and are people who are conversant with issues in the power sector