FG Will Meet You in Court, Fashola Tells Power Gencos

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  • Says they misconceived their rights in NBET’s N701bn facility
  • Expects substantive chair for NERC to be sworn in soon
  • REA, US institute to drive down cost of mini grid power to $0.20/kWh

Chineme Okafor in Abuja

Power generation companies (Gencos) in the country that filed a lawsuit against the federal government at a Federal High Court Abuja Division, on claims of poor operational treatments as well as complaints about the management of the N701 billion payment assurance facility of the Nigerian Bulk Electricity Trading Plc (NBET), do not understand the rights they have in the facility, the Minister of Power, Works and Housing, Mr. Babatunde Fashola, has said.

Speaking in a CNBC Television, a business cable channel, programme, which THISDAY monitored at the weekend in Abuja, Fashola explained that it was within the rights of the Gencos to approach the court to get justice on their complaints. He said the federal government was ready to meet the Gencos in court for the resolution of the dispute.

Fashola, however, maintained that the government would not tolerate attempts to politicise the existing disagreement, especially as the 2019 elections approach.

He had initially claimed that the government got security reports of clandestine meetings of the Gencos, perhaps, to disrupt power generation in the country.

But in the CNBC interview, Fashola said: “They (Gencos) have issues about payment to another investor who has a different contract from theirs. They have a misapprehension about the kind of rights they have under the payment assurance guarantee, and they have sought redress in court after meeting with me and after giving them assurances that I will escalate their demands to the authorities and institutions of government that would review them.

“Their contractual matters, for example, don’t reside in this ministry; they reside with the National Council on Privatisation and the BPE. I can’t act without their advice. So, within a week after we left that meeting with all of the positive assurances, they go to court, which is fine. That is conflict resolution, that is democracy and that is the rule of law.”

He further stated: “I take my time to decide what words to use and when I use them I take ownership of them, but you cannot dismiss those things from the system. And, that is why I am sounding a notice loud and clear that I am conscious of what is going on.

“Those who think that this is a season to play games because it might have political capital should know that we are mindful. We think that politics can be played differently, we want to raise the quality of the debate around our governance issues.”

The minister also disclosed that the government would soon appoint a substantive chairman for the Nigerian Electricity Regulatory Commission (NERC) after several years of being without one.

According to him, the Senate had screened a chairman designate for the NERC. He, however, did not disclose the name of the candidate, but the last nominee of President Muhammadu Buhari to the post was James Momoh, a professor of electrical engineering and computer science at Howard University, US. Momoh was nominated by Buhari after Prof. Akintunde Akinwande, from the Massachusetts Institute of Technology (MIT), rejected his appointment. Since then NERC has operated without a substantive chair but with six commissioners.

However, a reliable Senate source told THISDAY on Saturday that the upper chamber had not screened any nominee for the position of NERC chairman, saying no legislative approval would be given for the position until its rift with the executive over Acting Chairman of Economic and Financial Crimes Commission (EFCC), Mr. Ibrahim Magu, is resolved.

Speaking on the Power Sector Recovery Programme (PSRP), Fashola said: “The Power Sector Recovery Programme was something we worked with the World Bank on and their views were that it was much more far-reaching, what we had proposed, than what they were going to recommend to us. Because of that they were going to work with us in terms of getting funding supports, not only for the public sector arm but private sector arm.

“You will see that they recently approved a $486 million facility for transmission expansion. A mission of the bank also just concluded another assessment for the $1 billion, and one of the governance issues that was, perhaps, expected to be crossed is now likely going to happen, which is the full reconstitution of the board of NERC with a substantive rather than an acting chairman, with the senate screening that took place today. So, touch wood, all of the ducts are lined up in the right direction.”

In a related development, Rural Electrification Agency (REA) and Rocky Mountain Institute (RMI) of the United States have disclosed that they would release a first-of-its-kind, three-year roadmap on how to get electricity to Nigerians and Africans using mini grid solutions at $0.20 per kilowatt hour (kWh) by 2020. REA and RMI stated this in a statement that emanated from a recent workshop they held in this regard with operators and financiers in mini grid power from across the world.

According to them, the roadmap will outline how much capital is required and a plan for transitioning funding from grants and high-risk concessional and government sources to venture capital and private equity. They explained that more than 50 industry leaders and experts were at the workshop, which focused on delivering a profitable and scalable mini grid market business model.

At the workshop, they said market solutions centred on six key opportunity areas, which include grid-in-a-box hardware, better load management, effective customer engagement, efficient project development and operations and maintenance, affordable finance and supportive policy.

The statement also quoted billionaire businessman and founder of the Virgin Group, Sir Richard Branson, to have said at the workshop: “Nigeria has all the right drivers to become a leader in the mini grid market in Africa: great entrepreneurial tradition, a large self-employed population and market size. I’m looking forward to seeing how entrepreneurs in Nigeria leverage this opportunity over the next few years.”

Similarly, Managing Director of REA, Mrs. Damilola Ogunbiyi, said in the statement: “The electricity market for off-grid energy in Nigeria is huge and profitable for developers. Installing 1,000 mini grids each year for the next 10 years would provide power to millions of Nigerians currently off-grid.”

It equally quoted the Chief Executive Officer of RMI, Jules Kortenhorst, to have said: “I am excited and optimistic about cracking the mini grid challenge in Nigeria. Nigeria is blessed with some of the region’s most amazing entrepreneurs. We urge venture capitalists and impact investors from around the world to get involved with us.”