NBET Appoints Stanbic IBTC to Handle Settlements

Nigerian Bulk Electricity Trading Plc (NBET) has appointed Stanbic IBTC as the payment management services provider, or payment agent, to the Bulk Trader.

According to officials, the process took over six months of rigorous selection process that was managed by KPMG.

As payment agent, the bank will be responsible for efficient and effective payment processing between NBET and the generation companies in line with underlying power purchase agreements (PPAs).

At a contract signing between both parties in Abuja, Rumundaka Wonodi, managing director of NBET, noted: “ Stanbic IBTC will be responsible for efficient and effective payment processing between NBET and the GENCOs in line with underlying power purchase agreements.

Wonodi noted: “ In addition to effective payments on behalf of the Bulk Trader, Stanbic IBTC will support NBET’s treasury department with liquidity manage the and planning. Stanbic IBTC’s proposed platform for the services will secure easy access to the platform for NBET’s counter parties to view invoices, spool historical data and payments confirmations.”

He added: “We are very satisfied with the outcome of the process handled by KPMG that resulted in the selection of Stanbic IBTC as NBET’s payment agent. This appointment is in line with our strategy of employing the best service providers to complement out in-house competence especially our treasury functions, thereby keeping the Bulk Trader a lean and efficient institution.”

He stressed that “a payment agent for the transitional electricity market. Today’s event is the completion of almost a year process facilitated by KPMG, where our board  approved that we should go and procure, through a competitive process, a payment agent, primarily a financial institution that would undertake payment on behalf of Bulk Trader, and also support our treasury process.

“Through that process, Stanbic IBTC emerged the winner. Today, we are kind of finalizing that arrangement, and going forward, they will be providing is those services. It is important that we went out through this procurement platform, and it is important we have a payment agent that would support the Bilk Trader.

“One of the issues we would have in the Transitional Electricity Market (TEM), is that before the TEM, and even before this area, payment was structured in such a way that was not very familiar with market participants.”

NBET is a federal government owned company organization established as part of the power sector road map towards the full implementation of the Electricity Power Sector Reform Act. NBET enters into power purchase agreements with generation companies and resells power to distribution companies through the vesting contracts.

To fulfill this, according to Wonodi, the organization has been positioned as a credit worthy counterpart for current and future generation projects. NBET’s current capitalization is currently in excess of N128 billion.