Alleged 2bn fraud weakens investor confidence in Power sector – NERC

The allegation of fraudulent payments to two power plants levelled against the Nigerian Bulk Electricity Trading Plc has weakened investor confidence in the power sector says The Nigerian Electricity Regulatory Commission.

NERC, in a document published on its website on Friday, noted that there were disagreements between NBET’s Managing Director, Dr Marilyn Amobi, and two employees, namely the General Manager/Chief Financial Officer, Mallam Waziri Bintube and the Deputy General/Head Internal Audit, Mallam Abdullahi Sambo.

It said the two employees wrote a letter dated September 28, 2018 to the Minister of Finance, Mrs Zainab Ahmed, with a whistleblowing report requesting for urgent intervention to stem fraud in NBET.

The government-owned NBET buys electricity in bulk from Gencos through Power Purchase Agreements and sells through vesting contracts to the distribution companies, which then supply it to the consumers.

According to the statement, also copied in the letter, were the Secretary to the Government of the Federation, the Minister of Power, Works and Housing, the Economic and Financial Crimes Commission, the Independent Corrupt Practices and Other Related Offences, Amobi and NERC.

The commission stated that it was alleged in the report that there was over-invoicing of about N2bn in the payment of monthly capacity charges by NBET to Olorunsogo and Omotosho power plants.

NERC said it initiated the conduct of an investigation of the alleged N2bn over-payment by NBET to the power plants “pursuant to the powers of the regulator to approve Power Purchase Agreements NBET executes with generation companies and the imperative to maintain the integrity of the electricity market.”

It said it interviewed top management of NBET who were involved with the management of PPAs, as well as the petitioners, Bintube and Sambo over a period of two days.

The commission said it found that all payments made by NBET to the two power plants were in accordance with the terms of the PPAs, adding that NBET and the power plants executed appropriate waivers in accordance with the terms of the PPAs to address condition precedents.

It said, “Payments to the two power plants, in compliance with the terms of the PPAs, were effected by Mr Rumundaka Wonodi during his tenure as the managing director of NBET, Mallam Waziri Bintube during his tenure as acting managing director of NBET and continued by Dr Amobi upon her assumption on duty as managing director of NBET.

“These unfounded allegations by Mallam Waziri Bintube and Mallam Abdullahi Sambo have brought the Nigerian electricity supply industry into disrepute and weakened investor confidence in a sector where different agencies of government have been working collaboratively to address sector issues for the overall public good and in the interest of Nigeria.

“The commission hereby confirms that capacity payments to the Olorunsogo and Omotosho power plants by NBET are in line with the Power Purchase Agreement executed between the contracting parties and the provisions of the Supplementary TEM Order by the commission.”

 End

Source: Energy Mix Report