Govt capitalises electricity Bulk Trader with $800m as trading begins
Following the declaration of the Transitional Electricity Market (TEM), full bulk electricity procurement and trading has commenced, the Nigerian Bulk Electricity Trading Plc (Bulk Trader) has said.
During the transitional stage of the Nigerian electricity market reforms, the Bulk Trader is responsible for buying power from Independent Power Plans (IPPs) and from the successor generation companies, reselling the power to the distribution companies (DisCos) and eligible customers.
Meanwhile, the Federal Government, through various sources, has capitalised the Bulk Trader with $800 million to ensure adequate intervention and stabilisation in the TEM.
Managing Director of the agency, Mr. Rumundaka Wonodi, told reporters at the weekend that the Bulk Trader had executed power purchasing agreements with all the privatised PHCN generation companies and vesting contracts with distribution companies.
He spoke at the end of the Board meeting of the organization chaired by Finance Minister, Dr Ngozi Okonjo-Iweala, at the weekend. Shortly before the meeting, Okonjo-Iweala addressed workers of the agencies thanking them for the support and officially bidding them farewell.
He noted: “The transitional electricity market has begun and that means that we are beginning to receive payments from distribution companies from power supplied and we are making payments to the generation companies. Trading is fully begun.
“We are working on so many Power Purchase Agreements (PPAs). We are just about to close out the PPA on Zuma coal power and send it off to the regulator for approval. We have about four solar PPAs that we have just gone through the last round and those ones could be initial depending on how they react to that version. We have a couple of gas-fired plants; Century, Omar Power, Proton Energy, Exxon and quite a couple of projects that are close to initiating and close out.”
He noted that partners in the industry, stakeholders and investors now take for granted that a credit worthy off taker was present in the market to fulfil its expected role.”
He further stressed “ The Federal Government set up the Bulk Trader to fill the gap of a credit-worthy off taker with the power sector.