House Committee Probes N4.014trn International Customers’ Electricity Debts Since 2018
•To revisit utilisation of FG’s N1.3trn loan to NBET
Juliet Akoje in Abuja
The House of Representatives’ Committee on Public Accounts has summoned the Managing Director of Nigeria Bulk Electricity Trading (NBET) Plc over the N4.014 trillion debt owed by some international electricity customers.
The international electricity customers include Togo, Republic of Benin and Niger Republic.
The notice was contained in a letter titled: ‘Re-consideration of Auditor General for the Federation Annual Reports,’ dated November 30, 2022, with Ref. No: HR/PAC/SCOS/9NASS/QUE.64/48. It was signed by the Chairman of the Committee , Hon. Oluwole Oke (PDP-Osun).
While noting that the Committee does not allow representation, he directed the NBET Managing Director to appear in person alongside Dr. Marilyn Amobi, who served as MD/CEO from 2016 to 2020, to justify the reason for non-rendition of the audited accounts for the years 2014, 2015, 2016, 2017, 2018 and 2019, on Thursday, December 8, 2022, to defend his accounts laid before the parliament by the oAuGF.
The letter read: “The Committee is in receipt of your correspondence and has reviewed your 2017-2019 Audited Accounts and resolved to request for the following additional information/documents to enable the Committee carry-out its Legislative mandate: Indebtedness of International Customers (Republic of Benin, Togo and Niger to NBET and TCN from 2018 to 2022).
“External Auditor’s report showed that the Nigeria has international bilateral agreement on electricity energy delivery and sales with Republic of Benin, Togo and Niger. Prior to electricity transitional arrangement, these agreements were administered by Transmission Company of Nigeria.
“However, the Ministry of Power on 15/03/2016, directed that the administration of these international customers should be transferred to NBET. Moreover, before this can take place, certain agreements and negotiation have to be made and this accounted for the reason why TCN and NBET came up with a sharing formula to be used to split payment from international customers since TCN issued a single invoice for both administrative charges and energy payments.”
It stated further that based on this, “24 per cent of the payment received from international customers was deducted for administrative charges by TCN while the balance of 76 per cent was passed to NBET for the payment of Genco’s capacity and energy bill.
“The total invoices issued to international customers was N30.7 billion and N20.7 billion in the year 2018 and 2019 respectively.”
Hon. Oke asked for a schedule showing total invoices issued to international customers from 2018 to 2022.
“This situation has adversely affected the liquidity required of the companies to meet its obligations. The total outstanding invoices due from the Discos is N2.4 trillion and estimated interest receivable is N931 billion based on interest rate of NIBOR+4%.”
Furthermore, he directed that they produce a schedule showing the value of invoice raised by generating companies from 2016 to 2022, the amount paid by NBET and the outstanding balance as at date.
The lawmaker also unveiled plans to revisit the investigation into the audit report on the utilisation of N1.3 trillion loan facility granted by the federal government to NBET.
“External auditor’s report revealed that the company was granted a loan facility to the tune of N701 billion in 2017 while additional N600 billion was granted in the year 2019 by federal government of Nigeria.
“The company’s ability to meet its obligation is dependent on continuous support from the federal government. This is not sustainable. This is the ground upon which the external auditor reported in the audited accounts that its opinion was not modified on this matter,” he added.
To this end, the NBET Managing Director was asked to provide detailed utilisation records of the two credit facilities, loan repayment schedule showing how much it has repaid and unmatured principal and interest.
On the possible non-compliance with procedure of disposal of government asset, he observed that the “review of Statement of Cash Flow confirmed that the sum of 7.5 million represented proceeds realized from the disposal of Property Plant and Equipment in the year 2019. Also, the review of Fixed Asset Schedule revealed that the Motor Vehicles worth 69.9 million was disposed.”
He noted that NBET engaged in outrageous expenses.
In the bid to ascertain the infraction, the company was expected to, “produce utilisation records vis-a-vis the amount expended on international travel showing approval from SGF to travel, air ticket to and fro, international passport, list and details of beneficiaries, purpose of travel, evidence of training among others and provide utilisation records of this consultancy services.”
On the status of trade and other receivables from 2019 to 2021, he noted that: “Further assessment of statement of financial position showed that the company’s receivables as at 31/12/2019 was N1.5 trillion while that of 2018 was 1.06 trillion. Trade receivables are amounts due from customers for services rendered in the ordinary course of business.”
Consequently, he requested for schedule showing the breakdown of the years 2019, 2020 and 2021 receivables such as name of debtors, amount owing, date service rendered, date due for payment.