17 August, 2011, Sweetcrude, Abuja – The Nigerian government has heightened the reforms in the nation’s electricity sector as it approved a pioneer board as well as the appointment of a manager for the Nigeria Bulk Electricity Trading (NEBT) Plc.
The Minister of Finance, Dr Ngozi Okonjo-Iweala, is chairman of the board of the NEBT while Rumundaka Wonodi, a technocrat, will serve as its pioneer Chief Executive Officer.
The NEBT, also known as the bulk trader, was created by the National Electricity Sector Reforms Act of 2005 to fight the single biggest risk in the growth of the power sector – the issue of distribution companies which buy power from independent power generating companies, but are unable to collect enough revenue from consumers to pay for what they bought.
The Power Holding Company of Nigeria (PHCN), which hitherto managed the process owes huge debts from previous power purchase agreements (PPAs) it signed with independent producers such as Agip (N60 billion), Shell and Ibom Power.
The Minister of Power, Prof. Bart Nnaji, said NEBT would honour existing PPAs signed by the PHCN and take over the negotiation and signing of future power purchase contracts for distribution companies but it would not assume PHCN’s previous contract liabilities.
This is possible, according to him, because the bulk trader is backed by a government guarantee, which enables it promptly to settle obligations of any distribution company that defaults in payments for power purchased from independent producers.
Nnaji said that the NBET would however not become a government monopoly.
“Distribution companies which can, are free to sign direct PPAs with independent generation companies,” he said, and further explained that the “NBET shall exist only as long as it takes the distribution companies to become creditworthy and be able to directly negotiate their own power purchase agreements.”
In addition to the Finance Minister and Wonodi other members of the Board of NEBT include Saka Isau (SAN) as vice chairman, the Minister of Power; Director-General of the Bureau for Public Enterprises (BPE) and the CEO of Abuja Distribution Company (who will represent the 11 distribution companies’ CEOs).
Also approved by the President as members of the board are Mohammed Umara Kumalia, Haruna Sambo and Paul Usoro (SAN).
Prior to his appointment as CEO of NEBT, Wonodi led the Regulatory and Transactions Monitoring team at the Presidential Task Force on Power, which was charged with driving and monitoring the reform of the power sector. Before returning to the power sector in Nigeria, he was Director, Wholesale Power Origination, with North America’s largest wholesale power supplier, Constellation Energy Group based in Maryland, United States of America (US).
Wonodi holds a bachelors degree in engineering from the University of Benin, Nigeria, and a master’s degree in business administration (majoring in finance and strategy) from Yale University.