Role of NELMCO in the Power Sector Reform

Report
NIGERIA ELECTRICITY LIABILITY MANAGEMENT LTD/GTE
WHO ARE WE?
Presentation
at the
Technical Workshop on Power Sector Privatisation
Who are we ?
 We are the Nigerian Electricity Liability Management Limited/gte (NELMCO).
The National Council on Privatisation (NCP) set us up as one of the “other
transferees” companies envisaged under S.22(1) EPSR Act.2005 the EPSR Act
2005.
 We are incorporated under the Companies and Allied Matters Act, 1999 in
August, 2006 as a company limited by guarantee, with registration RC664658.
 Our shareholders are the Federal Ministry of Finance Incorporated (MOFI) and
the Bureau of Public Enterprise (BPE), providing guarantees to the extent of
90% and 10% respectfully.
 We are under the supervision of the Federal Ministry of Finance
 Our Board is chaired by the Hon. Minister of Finance with 5nos other board
members
Our Mandate
 To assume and administer the stranded debts and assets of PHCN
pursuant to the provisions of EPSR Act 2005

liabilities
 To assume and manage Pension of employees of PHCN
 To hold the non-core assets of PHCN, sell or dispose off or deal in any
manner for the purpose of financing the payment of debts or other
related matters.
 To takeover the management and settlement of PHCN’s Power
Purchase Agreement (PPA) debts as may be determined by the
National Council On Privatisation from time to time.
 To sell, mortgage, dispose off, deal in any manner of the property or
assets of the company as may be expedient with a view to promoting
its objects.
 To do all such other things as are incidental or may be thought
conducive to the attainment of the above objects or any of them.
Our Vision, Mission & Core Values
Vision
To be a world-class manager of liabilities and stranded Assets
in a transitional electricity market’
Mission
To ensure sanctity of contracts and settlement of pension
and third party liabilities
Core Values
Honesty, Integrity, Accountability, and Transparency
Our Inherited Debt Burden
Classification
=N=
1
PPA Indebtedness
72,646,026,048
2
Legacy debts
36,856,595,455
3
Financial Institutions debts (Local)
43,774,339,200
4
5
Financial Institutions debts (Foreign)
Other Creditors
6
Engineering Creditors
38,570,358,421
7
FGN Loans
14,719,526,444
8
Foreign Loans
40,275,609,923
9
PHCN Superannuation Fund
12,641,072,776
TOTAL
Status date: 15-4-2011
2,044,826,964
527,246,002
265,055,601,233
Additional Liabilities
Classification
=N=
1
PHCN Pensioners Buy-Out ( Provisional)
36,000,000,000
2
PHCN Pensioners Monthly Pension
18,000,000,000
TOTAL
GRAND TOTAL
54,000,000,000
319,055,601,233
Contingent Liabilities – Un-Crystallized burden

Environmental Liabilities- (Possible worries of Investors from western
countries)

Asbestos-related liabilities


Polychlorinated Biphenyls (PCBs)



Contaminants in the form of dielectric fluids in transformers and capacitors.
(Studies have confirmed significant percentage in PHCN transformers).
Contamination in open environment/sites that have been used to house or
maintain transformers.
Emissions


Investor from western economies will require government commitment to
the settlement of these liabilities post-privatisation.
To the atmosphere and discharges into water, management of solid waste,
etc
Third Parties Claims
 States Government and Local Governments, Corporate Institutions,
Communities and Individuals investment in infrastructure valued along
with PHCN infrastructures
(These will crystallise upon transfer of ownership to Investors)
Back-Up Non-core Real Properties
There are transferred Assets to back up the inherited liabilities. These are:











PHCN London Properties (3nos) :
PHCN Abuja Properties.
PHCN Lagos Properties
PHCN Zonal Office Buildings at Ikeja, Ibadan (uncompleted), Enugu,
Kaduna (uncompleted), Jos, Kano, and Yola
PHCN Golf Courses at Shiroro and Kainji.
PHCN Bonded Custom Warehouse at Apapa, Lagos.
PHCN Workshop at Ijora
PHCN Undeveloped Plots of Land across the country.
PHCN Medical Centres at Abuja and Oshodi and others.
PHCN Unsold staff quarters in some cites and Towns across the various
Zones.
Kainji Motel
Back-Up Current Assets (Receivables)
 Receivables in respect of government accounts Nation-wide of PHCN
Successor Distribution Companies.
Proceeds from the sale of Staff quarters to PHCN staff under the FGN
policy on government quarters and houses held in escrowed in some
banks.
 All Properties, Investments and monies owned and accruable to the PHCN
Superannuation Fund.
 The balance of unremitted deductions made on behalf of PHCN at source in
the vault of the Federal Ministry of Finance, from Lagos State Government
as counterpart contribution to AES PPA payment obligation. (this may
have constitutional implication)
Funding Requirements
S/N
DETAILS
=N=
INFLOWS:
Proceed from sale of Non-Core Assets
Proceed from Receiveables
Other receipts
17,379,400,000
30,000,000,000
14,141,072,776
Total
61,520,472,776
OUTFLOWS:
Total Sundry Liabilities
305,625,612,457
SHORTFUL
244,105,139,681
(FGN/OTHERS TO FINANCE)
Our Stakeholders Engagement Strategy
Engagement of professionals to provide consultancy and advisory
Services in our:
 Engagement of the National Union of Pensioners (PHCN Chapter) to
negotiated buy out of life pension.
 Engagement of third party Creditors to negotiated settlement.
 Engagement of relevant MDA’s for verification, reconciliation, support
and concessions.
Our Business Strategy
 Regularly liaise with NERC and Market Operators for funds to:


Settle Inherited PPA liabilities
Pay monthly pensions of PHCN Pensioners.
 Use of reputable professional and consulting firms to provide
advisory services in the areas of:




Actuarial valuation
Property valuation
Legal search
Negotiation skills and Capacity development
 Regularly liaise with appropriate FGN MDA’s to:


Fund shortfalls to inherited liabilities e.g., PENCOM
To agree possible debt swaps and forgiven and cancelled foreign debts
 Use of Financial Institutions for short - medium term bridging
facilities.


To take advantage of negotiated discounts due to delay in fund FGN
releases
To leverage on financial instruments such as bonds, etc
What Are The Challenges
Funding


Long-term

FGN budget releases ( Its regularity)

Lump sum monies needed to pay-off yet to be negotiated and
discounted liabilities that will also be needed.
Short-term



Funds to meet Monthly PHCN Pensioners bill
=N=600m per month.
Negotiation with stakeholders.


Creditors
Pensioners.
currently about
END OF PRESENTATION
THANK YOU
OUR CONTACT
Meet us
@
NIGERIA ELECTRICITY LIABILITY MANAGEMENT LTD/GTE
Plot 1359B, Alfayyun Street, Wuse Zone 3, Abuja,
Tel: 08033007082.
e- mail:
[email protected]
[email protected]
[email protected]

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