1. NIGERIA ELECTRICITY LIABILITY MANAGEMENT LTD/GTE Presentation at the Technical Workshop on Power Sector Privatisation WHO ARE WE?

2. 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

3. 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.

4. 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

5. Our Inherited Debt Burden Classification=N= 1PPA Indebtedness 72,646,026,048 2Legacy debts 36,856,595,455 3Financial Institutions debts (Local) 43,774,339,200 4545 Financial Institutions debts (Foreign) Other Creditors 2,044,826,964 527,246,002 6Engineering Creditors 38,570,358,421 7FGN Loans 14,719,526,444 8Foreign Loans 40,275,609,923 9PHCN Superannuation Fund 12,641,072,776 TOTAL 265,055,601,233 Status date: 15-4-2011

6. Additional Liabilities Classification=N= 1PHCN Pensioners Buy-Out ( Provisional)36,000,000,000 2PHCN Pensioners Monthly Pension18,000,000,000 TOTAL54,000,000,000 GRAND TOTAL319,055,601,233

7. Contingent Liabilities – Un-Crystallized burden  Environmental Liabilities- (Possible worries of Investors from western countries)  Asbestos-related liabilities Investor from western economies will require government commitment to the settlement of these liabilities post-privatisation.  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 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)

8. 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

9. 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)

10. Funding Requirements S/N DETAILS=N= INFLOWS: Proceed from sale of Non-Core Assets 17,379,400,000 Proceed from Receiveables 30,000,000,000 Other receipts 14,141,072,776 Total61,520,472,776 OUTFLOWS: Total Sundry Liabilities 305,625,612,457 SHORTFUL (FGN/OTHERS TO FINANCE) 244,105,139,681

11. 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.

12. 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

13. 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 currently about =N=600m per month. Negotiation with stakeholders.  Creditors  Pensioners.

14. THANK YOU END OF PRESENTATION

15. OUR CONTACT Meet us @ NIGERIA ELECTRICITY LIABILITY MANAGEMENT LTD/GTE Plot 1359B, Alfayyun Street, Wuse Zone 3, Abuja, Tel: 08033007082. e- mail: nelmco.mail@gmail.com nelmco.mail@yahoo.com nelmco.mail@gmail.comnelmco.mail@yahoo.com samjagbogun@yahoo.co.uk