Connect with us

Energy

Electricity companies’ debt to banks hit N107bn

Published

on

Spread The News

 

Total debts of electricity companies to various banks in the country still stands at a staggering N107bn, data from the Central Bank of Nigeria has shown.

Of the total N156.439 billion disbursed by the Central Bank of Nigeria from the N300 billion Power and Aviation Intervention Fund (PAIF), Discos, Gencos, National Daily gathered have repaid N50, 289 billion as at June 2017,leaving an outstanding N107bn

Giving further breakdown of the disbursements on a quarterly basis, the CBN disclosed that as at September 2016, power firms’ cumulative loans from the fund stood at N141.44 billion for 41 projects, representing 53.94 per cent of a total of N262.2 billion disbursed in the period, while the industry repaid N39.43 billion from their borrowings from the fund.

According to documents obtained from the CBN, the Fund is administered by the Bank of Industry, BOI, for onward lending to Deposit Money Banks at a maximum interest rate of 1.0 per cent, and disbursement at concessionary interest rates of no more than 7.0 per cent to client/projects of a 10 to 15 year tenor.

The CBN data also indicated that as at December 2016, power firms cumulative repayments stood at N42.578 billion from a cumulative of N151.852 billion borrowed from the PAIF out of cumulative disbursements of N272.615 billion. The projects for which the funds were assessed still stood at 43.

ALSO SEE: Anti-corruption war: ICC hears SERAP’s petition on N11tn electricity sector scam

As at March 2017, cumulative repayments of N46.6 billion had been recorded from the power firms, the CBN indicated, adding that cumulative disbursements to the power industry stood at N152.58 billion for 43 projects.

The setting up of the fund was heralded by the CBN’s realisation that without adequate infrastructure, the Nigerian economy cannot overcome its structural challenges and achieve sustainable growth and development.

The CBN also disclosed that the African Finance Corporation serves as Technical Adviser to the Fund, while it expressed optimism that the Fund would act as a much-needed catalyst to bridge the country’s infrastructural gap through lending at concessionary rates to the private sector.

The PAIF was set up through the CBN’s approval for the investment of the sum of N500 billion Debenture Stock, to be issued by the BOI. Of the total sum, N200 billion was set aside for the refinancing/restructuring of SME/ Manufacturing portfolios while the sum of N300 billion was earmarked for power and airline projects.

Trending