Jonathan urges transparency from new Electricity Trading Company

24 August 2011, Sweetcrude, Abuja – President Goodluck Jonathan yesterday inaugurated the board of the new Federal Government-owned Nigerian Bulk Electricity Trading Plc, charging it to ensure transparency and deligence in its duties.

He said this was necessary to continue to attract confidence of consumers and the goodwill of international partners, including the World Bank which is partnering with the government to provide a partial risk guarantee that will support the Bulk Trader Contract.

The new company, popularly called Bulk Trader and headed by the Co-ordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, is expected to buy up the power generated by new and old generation companies and assure investors stability in the sector.

Other members of the board include Saka Isan (vice chairman), Minister of Power (Barth Nnaji), Chief Executive Officer of the company (Rumundaka Wonodi), Director-General, Bureau of Public Enterprises (BPE) – Bola Onagoruwa, CEO of Abuja Electricity Distribution Company (AbdulGaniyu Umar), Hon. Mohammed Kumalia, Haruna Mohammed and Paul Usoro.

“Everything we do in this process of transforming the power sector must introduce a greater degree of transparency to the way in which we implement the reform and greater accountability in the heart of those responsible, so that the fundamental changes to the ownership, control and regulation of the sector initiated by legislation are achieved and the downstream benefits are realised,”he said.

Jonathan stated that he would ensure that the process needed to transform the sector “are not abridged in any manner or form.”

A critical component of the implementation of the Electric Power Sector Reform Act of 2005, the Bulk Trader is also expected to add value to the transformation of the power sector.

The President told the board to ensure they “act as a catalyst for new investment into the power generation market. The Bulk Trader is equally expected to stabilise the market for those already in the business, especially at this time when we have embarked on the privatisation of successor distribution companies of the Power Holding Company of Nigeria (PHCN).”

Jonathan regretted that “we are unfortunately faced with a situation where our power distribution companies find it challenging to collect enough revenue from their customers to pay for powers they receive from generating companies. In this situation, potential investors do not have the confidence that when they produce and deliver power, they will receive payment, so, they will not be encouraged to invest in the sector. Our goal of generating enough power for our people may therefore not be reached.

“Government has therefore incorporated the Bulk Trader as a guarantor to boost confidence in potential investors that they will be paid for the power they generate and sale to the distribution companies. I therefore expect that you would carry out diligently the job of negotiating and signing of future contract agreements with power producers. I have every confidence that you will faithfully execute this mandate of serving as a Bulk Board against the potential payment default by distribution companies until they become financially strong to directly enter into power purchase agreement on bilateral basis.”

He stated that his “administration has placed a premium not only on delivering more electricity per capita to people and businesses in Nigeria but also ensuring that whatever power generated is faithfully transmitted and distributed and paid for.”

Jonathan went on: “The distribution companies would therefore continue to put in place measures to ensure that everyone is provided with a meter so that they can capture the generated revenue and thereby ensure sustainable supply of electricity to the public.

Dr. Okonjo-Iweala thanked the President for inaugurating the board, saying that it “will make a great deal of difference in the production, distribution and sales of power in the economy.”

She pledged that “this very difficult area in the economy will be given the utmost attention and will receive the support that it needs to make visible difference. Mr. President, we pledge to you our desire to do the utmost to use the instrument as one of the means to ensure progress in the power sector.”

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