Concern as NDPHC guarantees naira 7 billion bank loan to private company

0

Niger Delta Power Holding Company Limited (NDPHC) has controversially guaranteed a 7 billion naira loan to a private company, ASolar Systems Nigeria Limited, under the Solar Power Naija program, TheCable reports.

ASolar Systems is promoted by Hakeem Shagaya (pictured), a brother-in-law of Vice President Yemi Osinbajo.

Osinbajo is the chairman of the board of directors of NDPHC, a company owned by all three levels of government.

NDPHC officials told TheCable that the board followed due process to approve the collateral and that they were not aware of any conflicts of interest.

In its letter to the Central Bank of Nigeria (CBN), NDPHC offered to act as guarantor of ASolar Systems to secure a N7 billion naira loan from Sterling Bank Plc with a term of five years.

If ASolar is in default of payment for 90 days, NDPHC will become liable and deductions will be made to its account as guarantor.

This is not the first time that the NDPHC has mortgaged its collateral resources to private companies, according to TheCable.

NDPHC previously engaged the federal government of Nigeria to provide a $ 118 million guarantee to Accugas, a 7Energy Ltd company (now owned by Savannah Energy), to supply gas to Calabar GenCo.

As the NDPHC does not generate enough revenue to pay, the responsibility is currently assumed by the Ministry of Finance which now pays monthly bills amounting to billions of naira.

THE SOLAR PROJECT

In April, Osinbajo launched the Solar Home System (SHS) in the community of Jangefe, Emirate of Kazuare, Jigawa State, as part of the Solar Power Naija program, a component of the Nigeria Economic Sustainability Plan ( NESP), to provide energy access to 25 million people. Nigerians in unserved communities across the country.

The Economic Sustainability Committee (CES) in charge of implementing the PNES is chaired by Osinbajo.

The solar program was supported by a concessional loan of 140 billion naira to private off-grid developers to provide solar systems to five million households.

Jangefe’s inauguration marks the start of 100,000 solar connections through a partnership between ASolar Systems Nigeria Limited, a local developer, and NDPHC – with funding from the CBN via a Sterling Bank loan facility under the supervision of the Rural Electrification Agency (REA).

The initiative will see beneficiaries pay 3000-4000 N per month, followed by a transfer of ownership after full payment of the systems.

“The electricity supplied is not free but we have put in place structures to make sure that the connections are affordable for all who will use it,” Osinbajo reportedly said.

“Then the Niger Delta Power Holding Company, ably led by Chiedu Ugho, which has been an important catalyst for off-grid solar systems such as we have here today. They were the first to launch the 100,000 systems with Asolar, the same group that provides this, supplied to several states in the federation.

But what has not been made public, however, are the details of the loan obtained from the commercial bank for the solar project, the role of NDPHC and the possible conflict of interest.

NDPHC APPLICING AS GUARANTOR

Here is a little background.

NDPHC, a government-funded agency, manages the assets of the National Integrated Power Project (NIPP), an initiative launched by the federal government to build independent power plants across the country and address the electricity shortage in the Nigerian Electricity Supply Industry (NESI) – using best business practices focused on the private sector.

NDPHC is co-owned by federal, state and local governments, and has invested throughout the power sector value chain.

He has focused more on gas-fired power plants over the years, but has recently taken an interest in solar projects.

The NDPHC board, chaired by Osinbajo, includes six state governors representing the geopolitical areas of the country.

The other members are Sale Mamman, minister of power; Zainab Ahmed, Minister of Finance; Abubakar Malami, Attorney General of the Federation (AGF), and Timipre Sylva, Minister of State for Petroleum Resources.

Prior to the launch of the solar home systems, the NDPHC board wrote to the CBN asking it to act as guarantor for Asolar to secure a 7 billion naira loan from the commercial bank.

“Asolar Systems Nigeria Limited (Asolar) being one of the companies registered under NEP intends to access 7 billion naira on the installation of the program (the installation) to deploy 100,000 solar home systems (SHS) across the country and would like to partner with NDPHC being the listed agency alongside REA for the implementation of the SHS program in the Economic Sustainability Plan. The facility will be provided by Sterling Bank Plc (Sterling Bank) through funds derived from their differentiated cash reserve requirements (DCRR) and has been approved by the CBN Board of Governors, ”the letter said.

“The Board of Directors of NDPHC has approved that, subject to satisfactory due diligence and business terms agreed between and among NDPHC, Asolar and Sterling Bank (Final Agreements), NDPHC serves as a guarantor for Asolar.

“The guaranteed amount will be adjusted annually to reflect reimbursements for the installation by Asolar in order to reduce the amount covered by the comfort letter.

“Subject to final agreements, the proposed process for calling this warranty is set out below. No part of NDPHC funds will be set aside to cover this guarantee and deductions will only be made from the NDPHC account if Asolar has accumulated a default for repayment for a period of 90 days.

“When that happens, Sterling Bank, who will be the PCA administrator for the program, will send a takedown notice to NDPHC copying the CBN director of banking services. The NDPHC working with MM. Asolar will have 14 days to fulfill its payment obligations to Sterling. “

SO WHO HAS ASOLAR TECHNOLOGY?

In 2019, ASolar promoter Hakeem Shagaya spoke on behalf of grant recipients from the Nigeria Electrification Project (NEP) during the signing of the agreement for the Performance Based Grant (PBG) and the Fund Based on Results (OBG) in Abuja.

“I implore all companies that have qualified to reach for the stars and I think you can even do ten times the capacity you put on paper,” he said.

Hakeem is the son of billionaire businesswoman Bola Shagaya, who is the vice president’s in-laws.

In 2018, Oludamilola, Osinbajo’s daughter, married Oluseun Bakare, Hakeem’s brother.

The deal also called into question the powers of the NDPHC board of directors to make a commitment of 7 billion naira – which would be above the agency’s approval threshold or limit.

Some of the questions raised are: Has this been approved by the Federal Executive Council (FEC)? Has there been any legal review or opinion from the Attorney General’s office of the federation on whether to issue such an instrument? Was there any advice from the Debt Management Office (DMO) before the NDPHC stepped in that a guarantee could crystallize?

NDPHC: “WE FOLLOWED THE REQUIRED PROCESS”

In response to a request from TheCable, Olufunke Nwankwo, head of communications and public relations at NDPHC, said the agency’s board followed due process in issuing the comfort letter for the private company.

“NDPHC is working with Asolar and the Rural Electrification Agency (REA) to implement the deployment of solar home systems across the country in accordance with the mandate given to NDPHC as part of the government’s economic sustainability plan. federal. Please be assured that NDPHC management has followed due process at every step taken so far in the project with all required approvals including board approvals, ”Nwankwo said.

“NDPHC did not issue a comfort letter to Asolar. We only helped CBN issue a letter of comfort to Sterling Bank to support this project based on our experience working with Asolar in the deployment of 20,000 units of solar home systems in Nigeria. It should be noted that the NDPHC has been mandated within the framework of the economic sustainability plan approved by the Federal Executive Council, as the executing agency for the 5 million solar connections nationwide of which the project is a part. current Asolar.

“We are not aware of any relationship between the chairman of our board and Asolar, as no such relationship was part of any consideration in the decision to work with Asolar. Our decision to continue working with the company was purely based on their performance in the 20,000 already deployed solar home systems they have delivered to.

“For clarity, it is important to note that NDPHC’s working relationship with the company dates back to 2016, when they were hired for the 20,000 solar home system. The hiring went through due process with the BPP “NO Objection” certificate obtained at the beginning of 2016 before the current management of the NDPHC.

“For the current project, the company also went through the prequalification and certification of the World Bank and the Rural Electrification Agency under the Nigerian World / REA electrification program, a condition required to participate in the five million solar connections. “

Laolu Akande, the vice president’s spokesperson, told TheCable that the conflict of interest issue is a “red herring”.



Source link

Leave A Reply

Your email address will not be published.