A payment management services provider and agent has been appointed by the Nigerian Bulk Electricity Trading Company Ltd (NBET) to facilitate payments for all electricity generated and distributed in the private-led electricity market.
This was disclosed on Tuesday during the contract signing ceremony between the Bulk Trader and the contracted bank, Stanbic IBTC.
Speaking, the Managing Director of NBET, Mr Rumundaka Wonodi said the engagement will complement in-house competence especially treasury functions to enhance its operational efficiency and transparency.
NBET noted that its operation through the Power Purchase Agreements (PPAs) it entered with Generation companies (Gencos) is to resell electricity to Distribution companies (Discos) through the vesting contracts after attaining a current capitalisation ‘in excess of N128billion (about $800million) by the federal government.
To ensure effectiveness, it said the engagement of a payment agent will enable efficient and effective payment processing between the Bulk Trader and Gencos in line with operational PPAs, just as the agent will also support its treasury department with liquidity management and planning.
It said the platform for the services will secure easy access for market participants including Gencos to view invoices, spool historical data and confirm payments made to the Bulk Trader.
Wonodi noted that the engagement of a payment agent is one of the critical markers for preparation towards the declaring the Transitional Electricity market (TEM) where all electricity transactions will strictly be rule and contract based.
“Through this, we do believe that the Gencos will repose more confidence in Bulk Trader as an institution that is capable and having a payment agent,” he added.
The Chief Executive of Stanbic IBTC Bank expressed their long term commitment to servicing the transparency need in the electricity sector saying “NBET as our strategic partner helps concretize our objective of providing stellar services across the power value chain in the recently privatised Nigeria Electricity Supply Industry (NESI) as it evolves into a fully market-led sector.”