Financial Energy Review
………..by Ben Ndubuwa……….
The Nigerian Bulk Electricity Trading Plc (NBET) has formally requested a renewal of its operating license with the Nigerian Electricity Regulatory Commission (NERC). This move is aimed at allowing NBET to continue its role as the primary bulk trader of electricity in Nigeria.
The request for renewal comes after NERC’s directive in July 2023, which prohibited NBET from entering into new electricity contracts. This decision was part of a broader regulatory overhaul intended to address issues within the Nigerian Electricity Supply Industry (NESI).
NBET, established on July 29, 2010, is fully government-owned and operates under the Electric Power Sector Act, 2005. It is tasked with purchasing electricity from generating companies through Power Purchase Agreements (PPAs). Its current operating license, initially granted for ten years and extended for an additional three years in 2021, is set to expire in November 2024.
During a public hearing in Abuja, NBET’s Acting Managing Director, Johnson Akinnawo, outlined the company’s vision for the next five-year term. He emphasized plans to evolve into an energy exchange platform to facilitate bilateral trading between power producers and large consumers through a new automated system. The transformation aims to enhance market efficiency, attract private investment, and drive payment discipline within the industry.
Akinnawo highlighted NBET’s current operational scale, managing a portfolio with an annual trading volume exceeding $2 billion and contracts with 27 generating companies and 11 distribution companies. He expressed the company’s commitment to fostering a self-sustaining electricity market independent of public funding.
Edu Okeke, Managing Director of Azura Power West Africa Limited, supported the renewal, arguing that NBET’s continued presence is crucial for investor confidence and financial stability in the power sector. He criticized the concept of limited-term licences for essential entities like NBET, suggesting that indefinite licences would better support long-term investments and operations.
NERC Commissioner for Legal, Licensing, and Compliance, Dafe Akpeneye, acknowledged the evolving power landscape since the last licence renewal and emphasized the importance of stakeholder input in the decision-making process. He noted that the Electricity Act 2023 and other regulatory changes necessitate a re-evaluation of NBET’s role.
The renewal request coincides with speculation about potential structural changes within NBET. Reports have indicated that President Bola Tinubu’s administration might consider dissolving NBET following the expiry of its current licence. Additionally, the Minister of Power, Adebayo Adelabu, has declined to renew the tenure of the current Managing Director/CEO, Nnaemeka Ewelukwa, amid previous controversies surrounding his predecessor, Marilyn Amobi.
As the regulatory review continues, the future of NBET remains uncertain, with significant implications for the stability and reform of Nigeria’s electricity sector.
