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China to pay $261.4 million for production of Made-in-Nigeria transformers 

Some Nigerian engineers and technicians are gearing closer to manufacturing Made-in-Nigeria transformers.

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China to pay $261.4 million for production of Made-in-Nigeria transformers 

As the “Buy Made-in-Nigeria products” campaign is gradually gathering momentum due to the support of the Federal Government, some engineers and technicians are getting closer to manufacturing made-in-Nigeria transformers. This, the Nigerian government believes, will solve the electricity supply problem in Nigeria.

The engineers and technicians, who are about 60, were sent to China to undergo training on how to produce transformers. The initiative, which is expected to bring about the production of Nigerian-made transformers by 2020, was first approved by former President Goodluck Jonathan and President Buhari gave his support for continuation.

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[READ MORE: PwC proposes possible solutions to the biggest problem facing Nigeria’s electricity sector]

According to the Executive Vice Chairman, National Agency for Science and Engineering Infrastructure (NASENI), Mohammed Haruna, China is a partner in the actualisation of the objective and the Asian country will account for 85% (which is $261.4 million) of the production while Nigeria will contribute the remaining 15%.

Haruna disclosed that the total cost of the project, which is in three phases, is $307.5 million. A factory for the production of Nigerian-made transformers would be set up in the country in preparation for the production kickoff date.

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power, Gencos want Discos’ job as it seeks to sell electricity directly to customers 

Haruna said Nigeria could profit from its power predicament.

“The agreement is to ensure that Nigeria is able to produce world-class power distribution transformers. From its design to the material selection and production, to its installation, commission and maintenance.

“As a result of that collaboration, we currently have 60 qualified engineers and technicians in China training to specialise in all the aspects of this production at the China Great Wall Industry Corporation. The second component of this collaboration is high voltage technology because currently in Nigeria, it is only at the University of Lagos that has high voltage technology centre for testing equipment in the power sector.

“The final component is, we are manufacturing solar modules in Karshi, but we import certain raw materials. The most important raw material – the solar cells – are not produced in Nigeria.

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“The Chinese are providing this support, In fact, 85% (or 261.4 million dollars) of the funds required for the three projects is being provided by the Chinese government through the CADFund. These are what the collaboration is all about and it is very good for Nigeria because it will help us produce substantial components of local content in the power sector.”

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[READ ALSO: GenCos want Discos’ job as it seeks to sell electricity directly to customers]

About engineers and technicians: Haruna disclosed that the training duration for the 60 engineers and technicians varies. The training had started in September and the longest training will last for six months while the shortest will last for three months.

“The project has already started. The training is according to the work plan because our system is such that the 60 trainees would be the ones to participate in the installation of the facilities in Nigeria.

“They started training in September and the training is for various durations. While some people’s training would be for six months, some engineers would be trained for four months and some others for three months

“We do not want the Chinese to come and do the installation for us; our own engineers would be trained adequately to come and do the installation for ease of sustainability and maintenance.

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“It is our hope that if things go as scheduled, depending of course on availability of funds from our own end, by February, March next year, machines would have started arriving.

“We would not start producing by February/March because the factory itself will take two to three years to set up.”

Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: fakoyejo.olalekan@nairametrics.com.

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Business News

REMINDER: FGN Ijara Sukuk Bond auction closes on 2nd June 2020

Proceeds from the Ijara Sukuk Bond auction will be used solely for the construction and rehabilitation of key roads across the six geopolitical zones of the country.

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The Debt Management Office (DMO), on behalf of the Federal Government, has reminded the general public that the offer for subscription to the N150 billion FGN Ijara Sukuk Bond will close on Tuesday June 2nd, 2020.

The offer for subscription was announced some days ago by the DMO, as Nairametrics reported. Below are the details of the offering.

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The Auction: N150, 000,000,000 – Rental Rate of 11.20% per annum IJORA SUKUK FGN JUNE 2027 (7-Yr Opening)

Arranger: FBNQuest Mechant Bank Limited and Lotus Financial Services Limited.

Opening Date: May 21, 2020

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Closing Date: June 2, 2020

Settlement Date: June 9, 2020

Summary of the Offer

Instrument Type: Ijarah (Lease) Sukuk

Issuer: FGN Roads Sukuk Company 1 Plc. on behalf of the Federal Government of Nigeria.

Units of Sale: N1,000 per unit subject to a minimum Subscription of N10,000 and in multiples of N1,000 thereafter.

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Rental Payment: Payable Half Yearly.

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Redemption: Bullet repayment on the date of maturity

Use of Proceeds: Proceeds will be used solely for the construction and rehabilitation of key roads across the six geopolitical zones of the country.

(READ MORE: FG impounds aircraft for illegal flight operations)

About Sukuk bonds  

Sukuk is derived from the word Sakk, which can be translated to mean legal instrument, deed, and cheque. Sakk can also mean to strike a deal on a paper document.

The origin of Sukuk dates to 7th century AD, where the first Sukuk transaction took place in Damascus, Syria in the Great Mosque of Damascus (Umayyad Mosque).

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Since Islam prohibits usury – collecting interest from your loans – interest-based bonds are banned in Muslim nations.

Difference between Sukuk and regular bonds

Sukuk indicates ownership of an asset. The assets that back Sukuk are compliant with Shariah. In other words, such assets adhere to the Islamic prohibitions on gambling, alcohol, tobacco, narcotics, and adult entertainment products and services.

Sukuk notes pay a fixed percentage return as a profit-sharing percentage of the underlying assets’ revenues.

Regular bonds, on the other hand, pay a fixed rate of return as interest (coupon) semi-annually or annually. 

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Business News

Just In: PPPRA reduces petrol price to N121.50 per litre

“After a review of prevailing market fundamentals in the month of May and considering marketers realistic operating costs as much as practicable, we wish to advise of a new PMS guiding pump price…”

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NNPC, Reduce funding oil subsidy - IMF to Nigeria , Oil marketers, PENGASSAN call for subsidy removal 

The Petroleum Products Pricing Regulatory Agency (PPPRA) has announced a new retail price band for oil marketers.

In a circular dated May 31st, as seen by Nairametrics, the downstream regulator said oil marketers are now expected to sell petrol within the price range of N121.50 and N123.50. Part of the circular said:

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“Please recall the recently approved pricing regime which became effective March 19, 2020, and the provision for the establishment of a monthly price band within which petroleum marketers are expected to sell PMS at the retail stations.

“After a review of prevailing market fundamentals in the month of May and considering marketers realistic operating costs as much as practicable, we wish to advise of a new PMS guiding pump price with the corresponding ex-depot price for the month of June 2020, as follows; price band N121.50 – N123.50 per liter.”

Details later…

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Hedge funds, institutional investors rush to own stakes in Bitcoin

Hedge funds are firms that offer alternative investments to a specific type of investors (high net worth individuals), in a bid to protect their investment portfolios from market uncertainty, while generating positive returns regardless of market sentiments.

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Bitcoin users rise in Nigeria despite Senate, CBN campaign against it, Nigerians losing millions to crypto fraud, Investing in cryptocurrencies in this economic shutdown, Bitcoin could hit above $100,000 by August 2021, Hedge funds, Institutional investors rush to have a stake in Bitcoin

With global economic uncertainty gradually becoming a daily norm, institutional and hedge funds around the world have been rushing to have a stake in crypto assets which  all have been outperforming other financial assets in 2020).

Just recently, a popular hedge fund based in New York –Grayscale Investments –caught the investment world by surprise by buying up Bitcoin (BTC) at a great rate in recent months.

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Lennard Neo, the head of research at Stack Funds, told Cointelegraph that institutional investors have been seeking for other options, not just to provide returns, but also to hedge their existing portfolio from downside risks. Neo said:

“Similar to Grayscale, Stack has seen an uptick in investors’ interest — almost double that figures of pre-crash in March — in Bitcoin. I would not say they are ‘gobbling up BTC’ blindly but cautiously seeking traditional structured solutions that they are familiar with before making an investment.” 

(READ MORE:The Empirical Truth about an average Nigerian’s price point)

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In addition, Paul Cappelli, a portfolio manager at Galaxy Fund Management, explained in detail the reasons for this demand. According to him, “we’re seeing increased interest from multiple levels of investors’ wealth channels, independent RIAs, and institutions.

“The recent BTC halving came at an interesting time amid the COVID-19 outbreak and the growing unease about quantitative easing. He noted: “It clearly demonstrated BTC’s scarcity and future supply reduction as concerns deepened around unprecedented stimulus by the Fed with the CARES Act.” 

Also, Michael Sonnenshein, the Managing Director of Grayscale Investments, explained briefly why his firm uses Bitcoin as an option in hedging its firm’s portfolio position.

“All three are facing issues this time around. Bitcoin has emerged as an alternative hedge, operating independently of the dramatic monetary policies enacted by central banks,” he said.

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What you need to know about Hedge Funds

They are firms that offer alternative investments to a specific type of investors (high net worth individuals), in a bid to protect their investment portfolios from market uncertainty, while generating positive returns regardless of market sentiments.

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