Teddy Oscar, Abuja
The sum of $350 million liquidity facility that the Nigeria Bulk Electricity Trading Company (NBET) has recently received from the Eurobond is being managed by the Sovereign Wealth Fund (SWF).
This is apart from the sum of N1,142,500,000 that has been proposed for the Bulk Trader in the 2014 Budget.
The coordinating minister of economy and minister of finance, Dr. Ngozi Okonjo-Iweala, dropped the hint in Abuja on Thursday.
“As you know, the Bulk Trader (NBET) has been very well resourced now to be able to carry out its intermediary market role in the power sector, and so, we are going to look at where we stand. You would recall that the bulk trader, in addition to the resources it has from the budget, it has also received $350 million as a liquidity facility, which is being managed for it by the Sovereign Wealth Fund (SWF),” she said.
Okonjo-Iweala, who spoke during her maiden visit to the office as its board of directors’ chairman, however, explained why the fresh injection is being managed for NBET by SWF, rather than any other government financial institute.
She said that it was for the Federal Government to get decent returns that would enable it to defray the interest cost.
“This was money from the Eurobond, and you would recall that most of the Eurobond was taken to support the power sector. Now, when you talk about it, this liquidity facility has to be managed in such a way that we are also able to repay the loan, isn’t it?
“Because it is part of the Eurobond, part of the loan. So, you need to think about the best way to invest this money. You can’t just have it sitting in the Central Bank (of Nigeria), which was what we were doing initially… because it would end next to nothing.
“So, the best opportunity was to give it to a premier investment corporation of the government, and say to them (SWF), you are managing lots of billions in access; manage this also so that we can get decent returns that would enable us to defray the interest cost, at least of the repayment of this facility.
“So, even if it’s not all, but it would be much more than it would get, sitting elsewhere. So, that’s why. It’s fresh, from the Eurobond, and then, we gave it to the SWF,” she added.
Okonjo-Iweala, who expressed satisfaction at how much NBET has performed within a short time, added that: “what is exciting to me is the ability they’ve had with some help to negotiate, to craft the PPA that would become a template for what we’ll do in the future, and also to demonstrate financial strength.”
In his submission, Mr. Rumundaka Wonoda, managing director and CEO of NBET, hinted on their future plan.
“One of the things that this company plans to do is to make sure that we stand on the good side of law… both policies, statement of account, financial control and the rest,” he added.
Incorporated on July 29, 2010 as the SPV for carrying out, under license from the Nigerian Electricity Regulatory Commission (NERC), the bulk purchase and resale function contemplated by the EPSRA, NBET has been set up to engage in the purchase and resale of electric power and ancillary services from independent power producers and from the successor generation companies.