Five firms get N18.261b electricity stabilisation fund

The Central Bank of Nigeria (CBN) has disbursed N18.261 billion to five electricity companies under the Nigerian Electricity Stabilisation Facility (NESF). During the exercise it advised companies benefiting from the N213 billion NESF to use the money for what it is meant. The CBN Governor, Godwin Emefiele, gave the advice yesterday in Abuja at the Nigerian Electricity Market Stabilisation (NEMS) Signing Ceremony where the N18.261 billion was disbursed.
The five firms, are     Eko Electricity Distribution   Company Plc, which received N5.164billion; Ibadan Electricity Distribution Plc, N11.367billion; Jebba Hydroelectric Plc, N816.831million; Kainji Hydroelectric Plc, N234.815million and Shiroro Hydroelectric Plc, N678.650 million.
These companies are expected to pay 10 per cent interest on the facility. Two per cent is for administrative cost, another two per cent will go to the banks and the six per cent balance goes to CBN.
Emefiele said the National Electricity Regulatory Commission (NERC), “will not allow electricity distributors to go home with obscene profits, but with time and the introduction of right assets, electricity tariff will come down and since they have ten years repayment period, consumers will not feel the impact.”
He appealed to the power firms to use the money they are getting from the Federal Government “for what they are meant for, to clear hurdles and purchase MD metres to improve on distribution and also improve your revenues for Gencos, for spare parts and maintenance so that things can begin to run better than they are right now.”
He explained that the CBN “sees this N213 billion Nigerian Electricity Stabilisation 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. We see this facility as a major initiative to reset the economics of the power sector.”
Emefiele said the CBN is working in partnership with the banks to provide this facility to address recent shortfalls in power sector revenues caused by needed adjustments in the electricity tariff and legacy gas debts,” adding that the facility will be paid back over the lifetime of a reset electricity tariff that is within the next ten years.
In exchange for this intervention, Emefiele said the government, “fully expect parties that are collecting these funds today to ensure that the funds are repaid as when due; ensure that all inputs into the generation of power are ramped up in a consistent manner; invest the funds in the necessary improvements in generation plant maintenance, transmission upgrades and distribution networks including transformers and better metering for end consumers.
Explaining the structure of the facility, he said: “This has been structured as a ten year facility so that the burden of the repayment will not be too much on you (electricity companies) so that it does not affect your cash flow even though the assets are yours this is a national assignment and all energy should be geared towards achieving stable power supply for our people.”