The Central Bank of Nigeria (CBN), yesterday, disbursed N39.5 billion, being the second tranche disbursement under the N213 billion Nigerian Electricity Market Stabilization Facility (NEMSF) to five distribution and six generation companies (GENCOs), cumulatively bringing the total amount so far disbursed to N57.72 billion.
A breakdown of the latest disbursement showed that the Enugu, Kano and Port Harcourt distribution companies (DISCOs) received N10.25 billion, N7.63 billion and N6.58 billion respectively as fresh funds while the Eko DISCO, which got N5.164 billion during the first disbursement also got an additional N43.3 million.
For the GENCOs, Transcorp, Ughelli, received N3.9 billion while Egbin and Geregu received N5.1 billion and N938.99 million respectively. Jebba, Kainji and Shiroro also got additional loans of N2.38 billion, N684.44 billion and N1.97 billion respectively.
Speaking during the disbursement, the chairman of the Nigerian Electricity Regulatory Commission (NERC), Dr Sam Amadi, stressed that the facility is not a political gift to support the friends of the ruling party.
“This is not the government rewarding PDP members, it is a bonafide market-based operation meant to ease the cash crunch and boost liquidity for the DISCOs and GENCOs to improve service delivery,” he said.
Amadi said the facility was geared towards unleashing efficiency in the market and ensuring that every party delivers on their performance agreements signed in the TEM.
The CBN governor, Godwin Emefiele, stated that the CBN sees the facility as a way to kick-start the electricity market in a way that ensures that the sector can deliver tangible improvement in power supply for all Nigerians. He said that the facility, which comes with a 10 per cent interest rate, is a major initiative to reset the economics of the power sector and that the CBN, in partnership with the banking sector, is providing this facility to address recent shortfalls in power sector revenues caused by needed adjustments in the electricity tariff and legacy gas debts.
In exchange for this intervention, Emefiele said that the receiving parties are expected to ensure that the funds are repaid as and at when they are due; ensure that all inputs into the generation of power are ramped up in a consistent manner; and thirdly, invest the funds in the necessary improvements in generation plant maintenance, transmission upgrades and distribution networks.
He said the loan has been structured as a 10-year facility so that the burden of repayment is not heavy on the companies such that it will affect their cash flows.
