Poor Remittances by Discos Threaten NBET’s N 701bn Power Fund

Risk of early depletion as four Discos pay N 6.08bn out of N44.85bn January invoice NBET officials introduce religion into leadership crisis

There are strong indications that the N701 billion payment assurance facility secured by the Nigerian Bulk Electricity Trading Plc(NBET) for power generation companies (Gencos) in Nigeria may not last up to the 24 months disbursement timeline it was originally planned for. This is because of the poor financial remittances of the 11 electricity distribution companies (Discos) in the country.

The fund, which was established in 2017, was to be disbursed till 2019, THISDAY gathered at the weekend that following the consistent drop in the monthly remittances of the Discos to the NBET for electricity sold to them, NBET might have been forced to take more from its N701 billion payment facility to ensure it met the 80 per cent payments to the Gencos. This, sources in the industry explained to the paper, constituted a real threat to the 24- month disbursement window of the facility. Similarly, the N BET, it was learnt, had documented this threat and presented the likely scenario – that is, how long the facility could take the sector if the poor remittance levels of the Discos continued – to relevant authorities of the federal government for actions.

In December 2017, NBET disclosed that the remittance performances of the Discos dropped to an all-time low of 8.33 per cent, as against the 100 per cent they were supposed to do. It explained then that five Discos, comprising Ikeja, Kano, Kaduna, Yola, and Jos, did not remit any money to it, and that it got just N4.47 billion out of the N50.21 billion December invoice it sent to the Discos. NBET also stated then that while the total financial shortfall for the month was N49.766 billion, it still paid the Gencos up to 80 per cent of their invoices with support from the N701 billion facility.

Again in January 2018, NBET stated that just four of the Discos – Abuja, Enugu, Jos, and Yola – paid parts of their invoices to it. It said out of N44.85 billion invoice it sent to the Discos in January, only N6.08 billion was received from the four Discos while seven others paid nothing. The remittance for January, it noted, represented 13.58 per cent of the invoice.

However, sources in NBET explained to THISDAY that if the poor Discos’ remittances continued, the N701 billion may be depleted by September 2018, some four months ahead of the 2019 disbursement duration. One of the sources even told the paper that a term-sheet had been prepared by NBET in this regard, and shared with the government. He said it was expected that this would lead to some pre-emptive measures from the government.