The preferred bidders for Afam Generation Company (Genco) and the Kaduna Distribution company (Disco) who emerged
as winners recently in the two yet-to-be privatised power utilities have paid up their 25 percent acquisition sums, the Bureau of Public Enterprise (BPE) has said.
Director General of BPE, Mr Benjamin Dikki disclosed this yesterday at the sidelines of a technical meeting between the new owners of the unbundled Gencos and Discos, and the Nigerian Bulk Electricity Trading Company (NBET) in Abuja.
Dikki said the 75 percent balance is to be paid up within six months.
"The preferred bidders for Kaduna and Afam utilities have paid the 25% on due date. They now have to pay the balance of 75% in another six month or so," he said.
The technical meeting was held to clarify the provisions of the Power Purchase Agreement (PPA) and the Vesting Contracts (VC) entered into by the Gencos and the Discos with the NBET. It also part of its preparatory efforts for a smooth transition to the Transition Electricity Market (TEM) which has been slated for March 1st.
TEM is the stage characterised by emerging competitions for the electricity market where all agreements including the VC, PPA, Share & Purchase Agreement (SPA), and the Gas Supply Agreement (GSA) would be actively adhered to by the market participants.
The Managing Director of NBET/Bulk Trader, Mr Rumundaka Wonodi in his address said there were misconceptions by the new owners on terms and conditions for the contracts.
He said, "We got comments from Gencos calling for changing the terms and conditions of the Vesting Contracts as they thought the Bulk Trader should take some risks instead of
passing it on to them."
Wonodi said there is a 'take or pay obligation for gas' in both the PPA and the VC to ensure that any gas cost coming through the PPA to the Bulk Trader would be passed down to the Discos through the Vesting Contract.
He stated that the Discos who are not clear on how retail tariff works had said NBET should make the payment and not them.
He clarified the lacuna by referring them to the fixed charge allowed in the Multi Year Tariff Order II (MYTO 2) which covers capacity payment, among others.
Wonodi noted that the Bulk Trader is only involved in getting the power and guaranteeing payment for such adding that, "It is a matter of education and letting the Discos know how this will work; so the essence of this workshop is providing clarifications, some of them constructs, and addressing the concerns raised."
Dikki earlier said it is partnering with the Nigerian Electricity
Regulatory Commission (NERC) to monitor the new owners beginning from May in the post privatisation era. He said, "The Share Purchase Agreement (SPA) gives a six-month period to allow the new owners to settle in. Already, we have commenced serious activities to prepare us for that purpose."