The Central Bank of Nigeria (CBN) on Monday commenced the disbursement of a total of N18.26 billion to five electricity distribution and generating companies as part of its N213 billion Nigerian Electricity Stabilsation Facility to the power sector.
The first beneficiaries of the special CBN power sector intervention facility include the Eko Electricity Distribution Company Plc and Ibadan Electricity Distribution Company Plc which received cheques valued at N5.16 billion and N11.36 billion respectively.
Others are the Jebba Hydroelectric Plc, Kainji Hydroelectric Plc and Shiroro Hydroelectric Plc which also received the sums of N816.83 million, N234.81 million and N678.650 million respectively.
The loan facility, which has a 10-year repayment plan, was granted at 10 per cent interest rate.
Speaking at the disbursement ceremony in Abuja, CBN Governor, Mr. Godwin Emefiele, commended the companies for being the first to have met “all our requirements to receive these funds.”
He said other power companies were expected to learn from the initial beneficiaries and “follow the rules as soon as possible so that we can disburse their tranche of the facility to them as well.”
Emefiele said the CBN considered NESF critical to kick start the electricity market in a way that ensured that the sector delivers tangible improvement in power supply to all Nigerians.
He added that the facility would further “reset the economics of the power sector.”
According to the CBN boss, the facility is expected to significantly address recent shortfalls in power sector revenues caused by needed adjustments in the electricity tariff and legacy gas debts.
He sad the facility would be paid back over the lifetime of a reset electricity tariff.
Emefiele, however, urged the beneficiaries 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.
He warned that the firms must invest the funds in the necessary improvements in generation plant maintenance, transmission upgrades and distribution networks including transformers and better metering for end consumers.
Also speaking at the occasion, the Minister of Power, Prof. Chinedu Nebo, who commended the CBN governor for matching words with action as well as committing to the development of the sector and the economy in general, said the intervention was “something that needed to happen” to liberate the country.
He said the CBN intervention had also caused an improvement in gas tariff, providing incentives to gas producers.
He said though the target of uninterrupted power supply had not been realised, there had been marked improvement in supply adding that this would be sustained.
Nebo said one of the goals of the federal government was to also take electricity to the rural areas.
The minister promised that the intervention would also give the consumer minimum pain in respect to tariff adjustment, stressing that the regulator would seek to protect the consumer against obscene profit from power companies.
In his remarks, on behalf of other beneficiaries, Chairman of Ibadan disco, Mr. John Ayeni, said the funds would be judiciously used to close existing gaps while Mr. Olubunmi Peters of the North South Power, owners of Shiroro, promised massive improvement in the power sector within the next two years.
Meanwhile, Nebo has stated that vandalism of gas pipelines and inadequate metering of customers have forced the revenue that accrued to the various electricity distribution companies across the country to drop from N18 billion monthly before privatisation to N12 billion.
Speaking yesterday at a regional workshop on metering, billing and loss reduction for distribution utilities held at the National Power Training Institute of Nigeria (NAPTIN) in Lagos, the minister stated that commercial losses were still high.
Nebo said while the defunct Power Holding Company of Nigeria (PHCN) earned a monthly revenue of N18 billion, the new investors that bought the assets earned N12 billion monthly.
He further disclosed that the Transmission Company of Nigeria (TCN) records N1.2 billion monthly as technical loss, translating to eight per cent.