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Senate passes Motion to investigate alleged misappropriation of $35ml in Power Sector

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Wednesday, November 08, 2017 7.30PM / Proshare WebTV 

The Senate of the Federal Republic of Nigeria in furtherance of its oversight function in the Nigerian power sector, moved the motion to investigate the management of about $35ml from the $350million that was released to the Nigeria Electricity Bulk Trading Company (NBET) by the Federal Government, from a July 2013 $1billion Eurobond.
 

NBET is a Federal Government-owned public liability company that deals in electricity trading and management of associated liabilities. This is why the release of the $350million to NBET, was to demonstrate the company’s preparedness to assume its role as a government-backed bulk trader of electricity.

 

The aforementioned release of the funds was intended to backstop NBET with new investors by providing these investors with the assurance that NBET was a credit-worthy off-taker of power with the requisite capitalization to meet its obligations.

 

As a confidence-building measure, this $350million was domiciled in the Nigerian Sovereign Investment Authority (NSIA) for structured reinvestments in a low risk manner that will provide NBET with the necessary liquidity.

 

However, reports have it that there have been ongoing attempts by the Federal Ministry of Power, Works and House to retrieve this $350million, and divert the funds to some ‘Fast Power Projects’ that have not been appropriated by the National Assembly.

 

Already, $35million of the non-appropriated public funds have been spent on the aforementioned scheme, with $29million paid to General Electric for turbines, and $6million paid to other entities as ‘consultancy fees.’

 

Moving forward the Senate has resolved to seek clarifications and investigate the following critical issues;


-Who were these consultants, and how were they procured?
-Was due process followed in the award of the $6million consultancy contract?
-Why was this transaction cloaked in so much secrecy?
-Why is the Ministry of Power Works and Housing constructing new power plants when government has several idle power plants?


To answer these questions, the Senate has resolved to take the following actions;


-Mandating its Committees on Power and Public Accounts to invite the Minister of Power, Works and Housing to render a detailed account of how the public funds were spent on the Fast Power Project; evidence of the feasibility studies conducted to show the viability of the project; and the requisite appropriation by the National Assembly as required by the Constitution.


-Mandate the aforementioned Senate Committee to investigate and consider summoning the NSIA; Nigerian Electricity Bulk Trading Company to establish the status of the $350million; and


- Mandate the Committee on Finance to investigate the actions of the NSIA inclusive of the issues raised in this Motion. As well as look into how policy decisions are made decisions are made on this issue. The Committee has been asked to submit its report to the Senate in two weeks.

Considering the challenges in the Nigerian power sector and how vital it is to accelerate economic growth, this development will generate a lot of interest in the public.

 

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