CBN’s support to power sector to hit N1.695tn

The financial support provided by the Central Bank of Nigeria (CBN) to Nigeria’s power sector is set to hit a total of N1.695 trillion, making it the single largest creditor to the sector, an analysis of a report from the apex bank has disclosed.

It was stated in the CBN annual report for 2018, that as at the end of 2018, it had granted total credit of N1.095 trillion to the power sector under the three different schemes it set up.

The schemes included the Nigerian Electricity Market Stabilisation Facility (NEMSF), which was made to settle outstanding payment obligations due to market participants during the interim rules of the market as well as legacy debts owed by the Power Holding Company of Nigeria (PHCN) to gas suppliers; the Power and Airline Intervention Fund (PAIF); and the Payment Assurance Facility (PAF) extended to the Nigerian Bulk Electricity Trading Plc (NBET) to settle invoices of generation companies (Gencos) to a minimum level of 80 per cent.

However, with the bank also expected to provide additional N600 billion as proposed by the NBET in its report of the implementation of the N701 billion PAF, its total credit to the sector would hit N1.695 trillion.

According to the CBN document, the sum of N62.88 billion was disbursed to 37 projects in the power sector in 2018, under the NEMSF, and this brought the cumulative disbursement since inception of the facility in 2014 to N183.09 billion.

It further stated that the total of N14.89 billion was repaid by 11 Discos during the review year, bringing the cumulative repayment since inception to N30.46 billion.

Listing what had been achieved in the sector through the NEMSF, the CBN said that significant capital expenditure (capex) in the industry, leading to recovery of generating capacity of more than 1,200MW in both hydro and thermal plants through the overhaul of turbines was recorded.

“Execution of capacity recovery programme was carried out in three hydro power stations as follows: intake under water repair project, overhaul of Unit 4 and compliant metering/supplementary protection at Shiroro Dam; overhaul of 2G6 at Jebba Hydro; and rehabilitation of three units at Kainji Dam.

“Rehabilitation of 10 gas turbines at major thermal power plants, including Geregu, Transcorp Ughelli, and Ibom Power Plants,” it explained