Another significant component of the power reform programme is about to berth following the approval of a pioneer board for the much-awaited Nigeria Bulk Electricity Trading (NEBT) Plc.
The NEBT, also known as the bulk trader, was created by the National Electricity Sector Reforms Act of 2005 to fight the single biggest risk in the growth of the power sector – recouping of investment by distribution companies.


The companies buy power from independent power generating companies but are unable to collect enough revenue from consumers to pay for what they bought because of regulated pricing.
Minister of Power, Prof. Bart Nnaji, announced Tuesday that President Goodluck Jonathan had appointed the board.
Minister of Finance, Dr. Ngozi Okonjo-Iweala, is chairman of the board while, Mr. Rumundaka Wonodi is the Chief Executive Officer (CEO).


The Power Holding Company of Nigeria (PHCN), which hitherto managed the process, owes huge debts from previous power purchase agreements (PPAs) it signed with independent producers such as Agip (N60 billion), Shell and Ibom Power.
Nnaji said that NEBT would honour current PPAs signed by PHCN and take over the negotiation and signing of future power purchase contracts for distribution companies but it would not assume PHCN’s previous contract liabilities.


This is possible, he said, because the bulk trader is backed by a government guarantee which enables it to promptly settle the obligations of any distribution company that defaults in payments for power purchased from independent producers.
However, Nnaji said NEBT would not become a government monopoly.
“Distribution companies are free to sign direct PPAs with independent generation companies. NBET shall exist only as long as it takes the distribution companies to become creditworthy and be able to directly negotiate their own power purchase agreements,” he said.


Other board members are Mr. Saka Isau (vice-chairman), the Minister of Power, Director-General of the Bureau of Public Enterprises (BPE), and CEO of Abuja Distribution Company, who will represent the 11 distribution companies’ CEOs.
Also approved as members of the board are Hon. Mohammed Umara Kumalia, Haruna Sambo and Mr. Paul Usoro (SAN).
Wonodi led the Regulatory and Transactions Monitoring team at the Presidential Task Force on Power which was charged with driving and monitoring the reform of the power sector.


Before returning to the power sector in Nigeria, he was Director, Wholesale Power Origination with North America’s largest wholesale power supplier, Constellation Energy Group, based in Maryland, USA.
He holds a Bachelor’s degree in Engineering from the University of Benin, Nigeria, and a Master’s degree in Business Administration, majoring in Finance and Strategy, from Yale University.