The power Distribution Companies (DisCos) has said that out of the N1.8 trillion so far injected into the power sector, they have only accessed N58 billion loan from the Central Bank of Nigeria (CBN) N214bn loan facility, which is being repaid.
According to Executive Director, Research and Advocacy, Association of Nigerian Electricity Distributors (ANED), Barrister Sunday Odutan in a statement, the firms have never gotten any free money from the Federal Government.
He said this explanation is necessary to help in setting the records straight as there is a belief that power sector operators including the DisCos have been given N1.8trn free money by the Federal Government since the 2013 power sector privatisation.
At the opening session of a public hearing on “Power Sector Recovery Plan and the impact of COVID-19 Pandemic” by the Senate Committee on Power on Monday, the President of the Senate, Ahmed Lawan in his address said, “Government should not be giving free money. 1.8 trillion naira has been given to DisCos maybe in their books. The actual money might have been given to the GenCos.
“Government cannot afford to just spend money that you hardly understand why it is given and I will advise the Executive that next time, to give such money, bring it to the national Assembly for approval,” Lawan had said.
But ANED in the statement said only about three percent of the N1.8 trillion funding for the power sector has gone to the DisCos.
The association said CBN in 2014 provided N214bn Nigeria Electricity Market Stabilization Fund (NEMSF) but that the DisCos were only able to access N58bn of that till date, “and that is on the DisCos’ account books as collateral for our Letters of Credit (LC) which DisCos are repaying every month.”
The N214bn fund was not only for the DisCos but to all players in the power sector, including the GenCos, ANED said.
It noted that the federal Government gave the Payment Assurance Guarantee of N701.9bn to the GenCos in 2017 through the Nigeria Bulk Electricity Trading Plc (NBET) to help the power stations meet their gas obligations to sustain power generation.
Another N600bn was approved for the GenCos in 2019 through NBET for similar purposes. “However, the DisCos have only partaken in the N213bn NEMSF facility which is being deducted every month at source by CBN with about 10 percent interest rate for 10 years.”
ANED also reminded the government that at privatization, the N100bn commitment that was made by the government to cushion low pre-existing tariffs before commencement of tariff setting, was not implemented.
“The CBN NEMSF 1 fund was not a subsidy but a loan to address legacy gas debts and tariff shortfalls. The NEMSF Loans currently hamper DisCos’ balance sheets, worsened by the difference in Aggregate Technical, Commercial and Collection (ATC&C) loss as used in the Tariff Model in line with the reality.
“If the N100bn subsidy was given to DisCos, it would have reduced the liability of the DisCos for better services,” it noted.
The DisCos also decried cases of hardship caused by the COVID-19 pandemic. “As in other countries, recognition of hardship from COVID 19 should also be done by Nigeria. The Federal Government and its agents should embark on sensitization campaigns informing customers of the benefit of paying their bills and the need for cost reflective tariffs,” it advised.
NAICOM Licences Seven New Insurance Firms
By Sola Alabadan
The National Insurance Commission (NAICOM) issued operational licences to seven insurance companies in Abuja today, in line with Market Conduct & Business Practice Guidelines.
The new insurance firms are Heirs Insurance Limited (General), Heirs Life Assurance Limited, Stanbic IBTC Insurance Limited (life), Enterprise Life Assurance Company, FBS Reinsurance Limited, Salam Takaful and Cornerstone Takaful Insurance Company Limited.
The Commissioner for Insurance, Sunday Thomas, who gave the operational licences to the five firms at NAICOM Head Office, said the Commission has issued operational licences to the firms to operate insurance business.
According to him: “The National Insurance Commission (NAICOM) received applications from the under listed companies for registration as Insurance and reinsurance Companies to transact insurance and reinsurance business in Nigeria.
“In fulfillment of the statutory provisions of extant laws for the registration/licensing of insurance Companies, the general public is hereby informed that the Commission has commenced the process of registering the companies.
Consequently:” Heir Insurance Limited (General) has picked, Olaniyi Stephen Onifade as its Managing Director, Stanbic IBTC Insurance Limited, picked, Akinjide Orimolade as Managing Director; Heirs Life Assurance Limited picked Abah Okoriko and Enterprise Life Assurance Company Nigeria Limited picked Fumilayo Abimbola Omo.
“FBS Reinsurance Limited is led by the former Commissioner of Insurance, Fola Daniel. FBS is bringing together professionals with proven experience from the brokerage and underwriting units of the industry including Bala Zakariyau, the former managing director of Niger Insurance who currently plays in a support unit of the Nigerian aviation industry, Ahmed Olaniyi Salawu of the Standard Insurance Consultants, and Wole Oshin Bankole of the Custodian Investment Plc that has just taken a plunge into the property sector by taking a large chunk of the United Property Development Company, a subsidiary of the UACN Plc.
“These crops of professionals represent those with firm beliefs that there is a big insurance potential in Nigeria and indeed, the African continent. Others are Ebele Ofunneamaka Okeke, from Nnewi North, Anambra who rose to the position of the Head of Nigerian Civil Service before her retirement, and also, Yusuf Hamisu Abubakar, a lawyer, and an accomplished administrator and businessman with vast experience at the senior executive level in power and communication sectors.
“The reinsurance firm is required to pay the new N20 billion capitalisation stipulated by the commission under the reform exercise for it to start a business in the industry.”
Power: FG Ready To Support DisCos’ Initiatives – Minister
Mr Saleh Mamman, Minister of Power, says the Federal Government is ready to support any initiative by electricity Distribution Companies (DisCos) aimed at addressing the challenges facing the power sector.
The News Agency of Nigeria (NAN) reports that Mamman spoke at the inauguration of Eko Electric Distribution Company’s (EKEDC) Supervisory Control And Data Acquisition (SCADA) System on Thursday in Lagos.
Mamman said : “I felicitate with and commend the EKEDC’s Board of Directors and management for this milestone.
“SCADA is one of the most advanced technologies in the power distribution business globally and I am optimistic that this event will translate to improved service delivery within EKEDC’s network.
“The inauguration of this SCADA system will help EKEDC monitor and respond quicker to faults and reduce the outage durations which would improve quality of service delivery to customers.”
According to him, the SCADA project will help the DisCo meet its set objectives under the recently executed Service Level Agreements with the Transmission Company of Nigeria (TCN).
He said the project would provide access to real time data that enables distribution system operators to make informed decisions that improve reliability and availability, consistent with the targets of the Service Based Tariff (SBT) regime.
Mamman said the FG was working assiduously to address the challenges of the power sector through initiatives such as the National Mass Metering Programme, the Siemens AG Power Project and upgrade of power infrastructure across the country.
Earlier, Mr Adeoye Fadeyibi, Managing Director, EKEDC, thanked the Central Bank of Nigeria (CBN) for its support to the Nigerian Electricity Supply Industry which paved way for the SCADA project.
Fadeyibi said : “SCADA is a centralised computer system which represents the evolution of our network operations from the present physical monitoring, remote coverage and relay of network information.
“By contrast, SCADA innovatively gathers real time information, identifies loopholes or breaches in the network and transfers this data back to a central site where the necessary analysis and control is carried out.
“The result of this analysis is then displayed in a logical and organised fashion. The project involves monitoring, control, fault tracking, data analysis and operations optimisation of our high-tension network.
“As part of Eko DisCo’s effort to improve operational efficiency, revenue generation and reduction of our Aggregate Technical Commercial and Collection Losses, we have implemented the SCADA project to automate our electric power distribution network across our franchise coverage area.”
He said the achievement by the DisCo showed that the FG’s Power Sector privatisation programme was a laudable decision, as it had completely transformed the sector and the Nigerian Electricity Supply Industry.
Emirates Offers Travellers $500,000 Multi-risk Travel Cover
Emirates airlines has announced that it will provide travellers a multi- risk travel cover worth $ 500 , 000 on top of its current COVID-19 cover.
The airline stated that the new multi- risk travel insurance and COVID-19 cover will automatically apply to all Emirates tickets purchased from December 1 , and extend to Emirates codeshare flights operated by partner airlines , as long as the ticket number starts with 176.
Emirates Chairman and Chief Executive , Ahmed bin Al Maktoum was quoted as saying , “ Emirates was the first airline to offer complimentary global COVID -19 cover for travellers back in July , and the response from our customers has been tremendously encouraging.
“ We have not rested on our laurels and instead continued to look at how we can offer our customers an even better proposition. We are very pleased to be able to now provide this new multi- risk travel insurance and COVID – 19 cover , which is another industry first, to all our customers.”
He added, “ We aim to give our customers even more confidence in making their travel plans this winter and moving into 2021 by the launch of this feature .”
Highlights of the coverage include out -of – country emergency medical expenses and evacuation up to $ 500 ,000 , valid for COVID -19 ( contracted during the trip ) and other medical emergencies while travelling abroad.
It also involves trip cancellation up to $ 7 ,500 for non- refundable costs if the traveller or a relative ( as defined in the policy ) is unable to travel because they are diagnosed with COVID- 19 before the scheduled trip departure date , or for other named reasons – similar to other comprehensive travel cover products.