The Central Bank of Nigeria (CN) has released a total of N18bn to five electricity firms under the Nigerian Electricity Stabilisation Facility from the original N213 billion pool. The funds were disbursed to two electricity distribution companies and three electricity generating companies during the Nigerian Electricity Market Stabilisation (NEMS) signing ceremony in Abuja on Monday.
The beneficiary firms include Eko Electricity Distribution Company Plc N5,164,365,623.88; Ibadan Electricity Distribution Plc, which got N11,367,311,028.00; Jeba Hydroelectric Plc, N816,831,881.50; Kainji Hydroelectric Plc, N234,815,594.62 and Shiroro Hydroelectric Plc, N678,650,019.72.
CBN Governor, Mr. Godwin Emefiele, warned the firms to use the fund judiciously and also to use the money they are getting from the Federal Government to purchase MD metres with a view to improving on distribution services and revenues.
According to the governor, the companies are expected to pay an interest of 10 per cent on the facility with two per cent going for administrative charges, while another two per cent goes to the banks and the balance of six per cent to the central bank.
However, he warned the National Electricity Regulatory Commission (NERC), which is the regulatory body, not to allow electricity distributors to go home with obscene profits.
It is believed that with the introduction of right assets, electricity tariff will come down and since the companies have 10 years moratoriums, consumers are not expected to feel the impact.
According to the Emefiele, : “We see this facility as a major initiative to reset the economics of the power sector,” he said, adding that the CBN was working in partnership with the banking sector to provide the facility to address recent shortfalls in power sector revenues caused by needed adjustments in the electricity tariff and legacy gas debts.
He urged the firms to ensure that the funds are repaid as and when due and ensure that all inputs into the generation of power are ramped up in a consistent manner.
Also, they should ensure they invest the funds so as to improve on the generation plant, maintenance, transmission upgrades and distribution networks including transformers and better metering for end consumers.
In his remarks, the Minister of Power, Prof. Chinedu Nebo, explained that the financing facility is not a grant by any means.
“This is something that needed to happen because of miscalculations entering a market without a robust tariff structure, struggling with all kinds of technical, commercial and collection losses beyond what was originally conceived and then finding a way to address this in a creative, responsible, responsive and sustainable manner to make sure that we come out of the rot and have a robust and buoyant power sector,” he said, adding that the CBN governor offered to fill in the gap and it was this synergy that led to the improvement of the gas tariff in the country something that had not happened in a long time.
“That gas tariff has now given incentive to the gas producers to produce more gas for the economy and especially for the power sector. This also brought about the massive infusion of resources/finances to keep the market afloat because the government could not just sit out and say we have sold this thing, no responsible government does that,” the minister noted.
The most creative way, he said, was to create a fragile balance between all the stakeholders. “Though we have not come to the point of uninterrupted power supply, there has been tremendous improvement in so many areas and there will continue to be,” he said.
