As part of efforts to address the worsening power situation in the country, the Central Bank of Nigeria (CBN) yesterday disbursed a total of N55,456,161,481 from its Nigerian Electricity Market Stabilisation Facility (NEMSF) to firms in the power.
A breakdown of the amount showed that while all the distribution companies got N8,670,234,863.76; the generating companies – N35,834,536,939; gas suppliers N10,491,710,788.66; all the service providers in the power value chain were given a total of N459,678,889.55.
The amount was the fourth batch from the N213 billion stabilisation that was designed by the central bank as part of development finance intervention in the economy.
Speaking during the signing of the agreement for the disbursement of the fund and presentation of cheques to the power sector investors in Lagos, CBN Governor, Mr. Godwin Emefiele, said the fourth batch disbursement marked a major milestone in the effort of the Bank in collaboration with the federal government to achieve a contract based electricity market.
This, according to him would activate Power Purchase Agreements (PPA) by the Nigerian Bulk Electricity Traders (NBET) and signal activation of industry contracts for power generation.
Emefiele added: “By the end of today, total disbursements to the Discos will be N49.73 billion (91.7%); gencos N54.29 billion (62.5%), gas companies N15.73 billion (36.9%) and service providers N0.46 billion (1.7%). With today’s event, the total disbursements under the initiative will be N120.2 billion, representing (57%) of the total amount earmarked.”
He explained that the CBN-NEMSF was initiated as part of the commitment it reached with stakeholders to address debts owed by generating companies to gas suppliers.
The first disbursement was effected on February 12, 2015 to industry participants. One year into the programme, the sum of N64billion or 30 per cent of the facility was disbursed to 18 participants.
The companies committed to using the funds to upgrade/refurbish their equipment and acquire new ones so as to improve service delivery. The facility was given at 10 per cent interest rate and repayment has commenced.
“Our review of the fund utilization and reports of impact by beneficiaries revealed that the intervention resulted in the restoration of a total of 905MW of power into the grid as a result of facility turn around maintenance, contribution of over 25 of the annual capital expenditure budget for the sector.
“Specific reports from Generating Companies revealed that there was execution of capacity recovery programmes in three hydro power stations as follows: Intake under water repair project, overhaul of Unit four and compliant metering/supplementary protection at shiroro dam; overhaul of 2G6 at Jebba Hydro and rehabilitation of 3units at kainji Dam under permitted utilizations of the facility. A total of 300MW capacity increase was reported as a result of fund utilization towards rehabilitation of both plants.
“The Intervention has also enabled the Electricity Distribution Companies (DisCos) to provide bank guarantees to Nigerian Electricity Bulk Trader, purchase of over 171,071 units of meters comprising both maximum demand and single phase meters; for instance Kano, Electricity Distribution Company (KEDC) alone acquired 62,021energy meters with the facility within the period. Rehabilitation of over 332kms of 11KV lines and 130km of 0.45KV lines; 70,310 No 500 KVA transformers procurement and construction of 34 new distribution substations and acquisition of one mobile injection substation under confirmed permitted utilization by the initiative,” Emefiele said.
Also speaking at the event, the Minister of Power, Works and Housing, Mr. Babatunde Raji Fashola, said there was need for all stakeholders in the power sector to continue to work as a team to end perennial supply in the country.
Fashola expressed optimism that the challenge faced in the power sector would be resolved.
“One of the problems we are having is gas. Some people have developed a mindset to continue to vandalise gas pipelines. Let me say it very clearly that it doesn’t help this country, it does not help their communities and it doesn’t help their people.
“Breaking oil pipelines increases pollution. So, let us be very clear about it. This is a time that the federal government had embarked on a clear clean -up programme. This is perhaps the most inclusive programme and we must all support it.”