Afam Fast Power: NBET May Write to Return $350m Eurobond to DMO

• As pressure to vire agency’s Eurobond fund to project mounts

By Chineme Okafor in Abuja

The Nigerian Bulk Electricity Trading Plc (NBET) might give back to the Debt Management Office (DMO) the $350 million Eurobond proceed it got from the federal government in 2013 as part of its capitalisation funds following increasing pressure on its management to sign off a part of it to fund the 240 megawatts (MW) Afam emergency power project the ministry of power is building, THISDAY has learnt.

Reliable sources who are conversant with the development told THISDAY yesterday in Abuja that the ministries of power and finance have continued to pile pressure on the agency to signoff the release of the fund by the Nigeria Sovereign Investment Authority (NSIA) but it remained reluctant to do so because of the possible future implications.

To avoid the controversies that this may generate, the management of the NBET it was learnt may have rather opted to officially return the money to the DMO, and from which the ministries could take it.

According to reports, Afam fast power was procured by the power ministry with no known budgetary facility or statutory funding in place. Even at that, the ministry has also not publicly disclosed the total cost of the project.

In addition, experts have stated that it was not competitively procured in line with Nigeria’s procurement laws, and a petition written by a group of energy experts against the project to the Economic and Financial Crimes Commission (EFCC) which THISDAY obtained, indicated that the EFCC had started an investigation into claims that government officials want to take from NBET’s $350 million with the NSIA to fund it.

EFCC, it was further learnt, had invited a couple of these officials for questioning on the claims. One of those allegedly invited for clarification was the Managing Director of NBET, Dr. Marilyn Amobi, whom a letter signed by the head of advance fee fraud section in EFCC, Ebelo Friday, and dated April 27, 2017, was addressed to.

Similarly, the petition stated that both ministries had initially asked the NSIA to release $34 million from the $350 million to offset the initial payments to General Electric (GE) for the construction of the trailer-mounted 240MW emergency power plant, but NSIA Managing Director, Mr. Uche Orji, refused ,unless with a written consent from the NBET.

Following this, THISDAY further gathered that a meeting between the two ministries, DMO and NBET, was held last week, at which the NBET was told that the $350 million belonged to the government and that it could use it for whatever purpose it deemed fit.

“That money is gone, they have decided to take it, and Azura will come on stream in May, eight months earlier. This is going to be a big challenge to NBET,” said one of the sources who preferred not to be mentioned in the paper.

Another of the sources who also wanted to remain anonymous, stated: “There was a meeting last week between the minister of finance, minister of power, permanent secretary power, and finance. As well as the DG DMO and MD NBET, amongst others, and NBET was told point blank that the money belongs to the government and since NBET is a government agency, government will now provide a sort of letter to back whatever obligations they enter.”

“However, NBET is not comfortable with that and would be sending a letter to the DMO and minister of finance this week to say they have to return the money to the DMO, and they can take it from DMO,” the source added.

One of the sources further explained that the letter of guarantee the ministries are proposing in place of the $350 million would be immaterial to potential investors.

“Government serially makes such promises and fail, and I doubt if any serious investor will rely on a letter from the government. If that money goes, the NBET is bankrupt, and what it is doing now is that it is insisting, just to hedge, that the money was given to it by the DMO from the Eurobond proceeds on the directive of the government, and as such, it would have to return the money to the DMO and then the ministry of power and finance can go there and take it, but they are saying no to that and that NBET should disburse the money by itself,” the source added.

When contacted to clarify this development, the Permanent Secretary in the ministry of power, Mr. Louis Edozien, did not respond to calls or text messages sent to his phone. Edozien  picked the first call on his phone but did not speak as he immediately dropped.