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Habu Sadeik Profile picture
Habu Sadeik
@HabuSadeik
Associate Chartered Accountant (ACA) || Financial Analyst || Power Sector Analyst || Political_Finance || Energy Finance || Opinions are solely mine
6 subscribers
Oct 19 • 22 tweets • 10 min read
Last month, I was opportune to moderate the power sector panel session at the Northern Nigeria Investment and Industrialisation Summit 2025 at Ladi Conference centre Abuja. @NNIIS25

The summit theme is around unlocking opportunities in mining, power and agriculture.

Thread!!! Image We had a series of panel discussions around power, agriculture and mining and some very interesting presentations from key industry stakeholders focusing on challenges and opportunities around the power sector.
Jul 21 • 20 tweets • 6 min read
So let me explain what Enugu did, even though it’s a source of concern and worry to the industry.

A new sheriff is in town indeed!

Thread!!! Image The cost of power generation is measured through NBET invoice.

FG is subsiding up to about 66% (100% - 34%) on average across all the discos in 2024.

In 2024, the average subsidy for Enugu is 68% (100%-32%).

It means FG is paying N68 of subsidy for every N100 worth of power. Image
Jun 29 • 40 tweets • 11 min read
How the Nigeria Oil & Gas Works - Part C

Let's complete our interesting discussion on the oil gas industry.

This time around, we are looking at production sharing contract (PSC) and petroleum fiscal framework.

No jargons involved but a long read...

Thread!!! Image Production Sharing Contract (PSC)

Production Sharing Contract (PSC) is another form of oil & gas contract that is mostly applicable for project in the deep offshore field and frontier basins.

A PSC is an oil agreement where:

The oil company pays all the money to explore and produce oil,

If oil is found, the company first recovers its cost (called cost oil),

Then the remaining oil (called profit oil) is shared between the government and the company.

Inside the PSC agreement, you also have the profit-sharing contract for the profit oil as applicable.

Meaning you will agree on how the government through NNPC, and the oil companies would share the profit oil.

It can be 60:40, 50:50, 70:30, in favour or against the oil companies depending on the cumulative production from the oil block.
Jun 27 • 19 tweets • 5 min read
Does the NRS assume the responsibility of collecting the revenues of NUPRC, NCS and others?

Let's look at that of NUPRC with the short thread below: Image NUPRC's core revenue lines are:

1. Royalties
2. Rentals
3. Gas flaring
4. Miscellaneous revenues (licenses & permits)

The biggest among the above list is royalties. Revenue from royalties is almost same as VAT generated for a month, sometimes even higher.
Jun 12 • 38 tweets • 9 min read
How the Nigeria Oil & Gas Works - Part B

Let's discuss another interesting part of the oil & gas industry, specifically on contracting issues and peculiarities.

We do it the simple way, no jargons as usual.

Thread!!!Image In line with section 85 of the PIA, let’s try to understand the applicable oil and gas contract in the sector.

1. Joint Venture Contract (JV)
2. Sole risk, and
3. Marginal Field (though, this is abolished)
4. Production Sharing Contract (PSC)
May 29 • 18 tweets • 6 min read
Let's go through the Ministry of Power Document and summarise.

Thread! Image Electricity policy document and Integrated resource plan was approved by the FEC.

What remains is the SIP - Strategic Implementation plan Image
May 25 • 27 tweets • 8 min read
How the Nigeria Oil & Gas Works - Part A

Let's discuss oil & gas sector from scratch - a simple ABCD approach that can give you the basic knowledge of the Nigeria's most lucrative industry.

No technical jargons. I promise😅

Thread!!! Image In the oil & gas sector, we produce oil from a certain location, and then export it to earn dollars which would serve as a revenue to the entire federation.

How do you extract the oil?
Where is it located?
What are the licenses needed?
Mar 13 • 24 tweets • 5 min read
Below are the tentative component cost of the grid power:

A. Gas - N46/KWh
B. Generation - N70/KWh
C. Transmission - N10/KWh
D. Distribution - N80KWh

Cost-reflective tariff - N206/KWh

Now, let's crack down the numbers and see if there are cost savings measures.

Thread!!! Image
Image All the 4 value chains above comprise the following general metrics inside its cost component:

1. Cost of investment (depreciation)
2. Finance cost
3. Operation/Maintenance cost
4. Salaries/Admin cost
5. Profit margin
Feb 9 • 14 tweets • 4 min read
PwC Budget and Economic Outlook 2025.

Let's look at the 2024 so far, and what to expect this year 2025.

Thread!!! Image Seven (7) key issues to consider in 2025.

No. 1 to 3 is crucial Image
Jan 2 • 11 tweets • 1 min read
Find below the details of the State governments equity stake in the 11 DisCos across the country.

State were allocated specific equity rights in DisCos based on 2018 @NERCNG valuations.

Thread!!! Abuja DisCo

Private (transcorp power) - 60%

FCT - 11.20%
Niger - 8.30%
Kogi - 4.20%
Nasarawa - 3.20%

FG - 13.10%
Nov 30, 2024 • 21 tweets • 4 min read
Let us look at some relevant data regarding this Tax reforms Bills.

I attached my excel template below, you can use it to put any assumptive data you may have.

I used GDP data as a proxy for derivation/consumption model. Image Because it is technically impossible to get derivation/taxable supply data based on locational consumption, I decide to used GDP which may also not be accurate with real figures.
Oct 31, 2024 • 16 tweets • 3 min read
Let me put figure to this VAT proposed formular and see how it is.

Take, for example, the following states
generates the below as VAT for a particular month.

Kano = N30b
Lagos = N100b
Rivers = N80b

Total = N210b

(You can skip to the last thread for a summary)

Thread!!! Based on the proposed law:

FG will take 10% = N21b
What remains is N189b shareable to state & LG (90%)

60% of the N189b to be shared based on derivation.

Based on the above, the derivation % is
(VAT generated by states/total VAT)
Oct 4, 2024 • 16 tweets • 3 min read
Let's look at some interesting data regarding the electricity sector.

The performance data for electricity in the country is very unfavourable when you remove the 3 giant DisCos, Ikeja, Eko & Abuja.

I made some analysis excluding them and the result is shocking.

THREAD!!! Image In the month of July 2024, the total losses made from all the DisCos is N96 billion, i.e. both technical, commercial and collection losses.

Averaging metering rate stands at 43% while customer counts is 13 million registered customers.
Aug 29, 2024 • 18 tweets • 3 min read
The dollar reserves with CBN;

Is not meant for spending (expense)
Is not FG money
Is not savings

Then what is it?

Let's discuss on a thread!!! Our reserves is just money that is meant to settle international trade and payments.
Payment is not equal to expense.

Let me give an example for you to understand, it maybe narrow.

Here is how the flow works.
Aug 13, 2024 • 25 tweets • 7 min read
The Nigeria electricity trading is changing from a perceived single-buyer to a bilateral trading framework.

In simple english, NBET (read as govt) has initiate a gradual and quick plan to exit the market and allow independent players to operate.

THREAD!!! Image Based on the diagram you saw above, the industry is operated by various contract across all levels.

The contract in red are not fully effective because of one reason or the other.

It is good for us to know where we are now,
Jul 1, 2024 • 23 tweets • 6 min read
My people, let's discuss your estimated billing today.

Dem cheat you, dem no cheat you, I understand😅 it's crazy out there.

No light and the bill remain stagnant.

Some customers have power to NOT pay if there is no meter provided!

Thread!!! There are 3 Main classes of customers:

1. Non-MD Customer
2. MD1 Customer
3. MD2 Customer

MD means "Maximum Demand"
May 21, 2024 • 21 tweets • 4 min read
I thought I have written about this TCN - NISO unbundling but when I checked I did not.

Alright, for this one is pretty easy and straightforward.

TCN is transmission company that carry out the function of system operation and transmission tower services.

Thread!!!
Image As you can see on the sketch organogram above, market operations and system operations is under the same umbrella while transmission service provider are those in charge of the actual physical infrastructure (Towers). Image
May 17, 2024 • 19 tweets • 4 min read
Okay, Let's look at the evolution of Nigeria's Electricity Sector.

Trust me, it will be interesting😎😅

In 1896, the first electricity was generated in lagos by the british colonial government as a street lightning to avoid burglary and other social vices.

THREAD!!! The light will be on up to 11pm before they turn it off.

The street lighting failed to achieve the purpose of putting an end to burglary activities in Lagos.

In 1929, The Nigeria Electricity Supply Company (NESCO) was established to properly
Apr 22, 2024 • 25 tweets • 6 min read
The implementation of a decentralised electricity system in Nigeria has officially begin.

This will be an interesting journey guys, I'm excited.

Enugu State are the pace-setter in this journey.

Follow me, let's simply explain what happen and what to expect.

Thread!!! Image The @NERCNG are the apex regulators in anything electricity in Nigeria.

The law has changed, given state power to also regulate and participate in the electricity activities.
Apr 17, 2024 • 25 tweets • 5 min read
Let's us discuss this inflation and exchange rate issue together.

Dollar rate is down, prices of goods are increasing.

Dollar rate is up, prices are also increasing, ahhh wahala oooo😅

We all should be worried. but why?

Thread!!! Image There are a lot of issues, uncertainties and problems leading to all this.

The first thing I will say is that most economic indices tend to lag especially if it's good for the economy at a point in time.

The positive effect of low fx rate will NOT come immediately
Mar 29, 2024 • 31 tweets • 7 min read
Let us take a look at what causes national electricity grid collapse and how it occurs.

What will happen before a grid collapses.

I will try to explain in a layman way.

Thread!!! There are 26-grid connected power plants currently.

These power plants generate the power that the entire country uses, and it's synchronised and distributed across the country by the TCN.

TCN are the ones that handle the distribution of power by sending it to Discos. Image