N210bn power Fund: Kaduna, Yola DisCo yet to access N51bn since 2015 ...other firms repay N19bn
Three years after the Central Bank of Nigeria (CBN) launched the N210 billion Electricity Market Stabilisation Fund (NEMSF), two power firms - Kaduna and Yola electricity Distribution Companies (DisCos) are yet to meet requirements to access N51bn of the facility since 2015 when the disbursement began.
A CBN report on the disbursement for this month obtained by Daily Trust showed that about 47 other power firms who benefited from the fund have repaid N19.3bn.
The NEMSF was meant to revive the ailing power sector with a N210bn market shortfall as at December 2014, the document revealed. Out of the N210.6bn pegged for the sector, CBN had disbursed N158.7bn (75 per cent); from this disbursement, the beneficiaries repaid N19.3bn while there is N139.3bn outstanding repayment.
Despite the facility repayment by other firms, CBN said it is yet to disburse 25 per cent of the fund, about N51bn to the two DisCos citing their inability to fully sign-on to the facility.
“Effort to sign on these DisCos are already been intensified as both DisCos have made remarkable progress in this regard,” the report noted.
Daily Trust reports that the market shortfall is officially about N800bn according to the Federal Ministry of Power, Works and Housing. But the private sector operators of the power firms have insisted that the shortfall has risen to over N1tn.
With the facility, operators were to clear the legacy debts wrapped around gas and contracts that lingered before the power sector privatisation in November 2013 to improve service delivery.
It is said to have a six months moratorium and the benefiting firms were expected to pay back the loans in 10 years at 11 per cent interest, some of the benefiting operators said.
On the impact of the disbursed fund, the report shows the benefitting DisCos provided N13.78bn security cover to the Nigerian Bulk Electricity Trading Plc (NBET) and the Market Operator (MO) as required under the vesting contracts/market rules to serve as guarantee for DisCos’ payment for energy charges and ancillary service charges.
It also helped the DisCos to purchase 704,928 meters for their customers; they also purchased and installed over 500 transformers to enhance the distribution networks.
CBN said the DisCos used part of the facility to rehabilitate over 2,000 kilometres of 11 kilovolt (KV) lines and 130km of 0.45KV lines.
While it said 56 substations were rehabilitated and constructed, over N24bn has been paid to gas suppliers to boost more gas supply for power generation. From inception of the fund, the report said over 1,000 megawatts (MW) of generation capacity at the Generation Companies (GenCos) has been recovered.