02 September 2013, Abuja – By The Nigerian Bulk Electricity Trading Company Plc, NBET, has disclosed that it is currently renegotiating existing Power Purchase Agreements, PPAs, that exists between defunct Power Holding Company of Nigeria, PHCN, and independent power generation companies owned by international oil companies, IOCs, in the country.
Managing Director of NBET, Rumundaka Wonodi, stated recently at a forum organised by the Market Operations, MO, department of the Transmission Company of Nigeria, TCN, to commence the formal registration of market participants in the Nigeria Electricity Supply Industry, NESI, that the company has initiated the renegotiation to take over the PPAs from the PHCN.
NBET is also known as the bulk trader.
Wonodi explained the bulk trader would assume all obligations and rights inherent in the existing PPAs, adding the PPAs would be novated to it but without past debts and liabilities incurred in the PPAs by PHCN distribution companies.
He said the PPAs that would be renegotiated include those that were signed between PHCN and Shell Petroleum Development Company, Nigerian Agip Oil Company, and AES, amongst others.
“We are currently renegotiating PHCN PPAs with IPPs that are owned by the IOCs. We will take over the PPAs and assume all rights and obligations in the PPAs when we are done renegotiating but it is important for the IOCs to note that as much as we are taking over the PPAs, we would not be responsible for settlement of debts in there.
“That responsibility lies with the NELMCO and we are not in the position to take up the debts and liabilities but novate the PPAs, it is simply a novation,” he said.
Wonodi further noted that the bulk trader was being strengthened to undertake its roles in NESI, which according to him, was to provide as much confidence as possible in the sector to boost investments for the expansion of the sector.
– Chineme Okafor, This Day