THE Bureau of Public Enterprises has said that the disbursement of the N213 billion intervention fund for the power sector has been shelved pending the resolution of some key issues in the sector.
Director General of the BPE, Benjamin Dikki said suspension of the fund was not unconnected with the Nigerian Electricity Regulatory Commission; NERC planned upward review of electricity tariff by 40 per cent.
Describing the planned tariff review as “strange,” he noted that it was not included in the agreement for the disbursement of the fund when it was introduced in 2014.The BPE boss noted that the upward review of electricity tariff by 40 percent when implemented, in addition to the CBN intervention, might lead to over-funding of the power sector, hence the CBN decision to suspend further disbursement of the fund.
The fund was introduced as a loan facility to assist power generating companies, GENCOs, and the distribution companies, DISCOs, to settle their gas debts, execute agreed metering programmes and finance procurement of transformers.
In other to ensure that its power reform is not seen to have failed due to the lack of financial capacity of the new owners, the government, during the privatization process acceded to the request of the investors for financial assistance.
While outlining the scope of the intervention that the N213 billion facility is designed to address, Alison-Madueke, the then Minister for Petroleum said that the fund would be used to settle the legacy gas debts which stands at N36 billion, execution of agreed metering programmes and procurement of transformers by distribution companies and execution of maintenance programmes and procurement of equipment by generation companies.
The Central Bank of Nigeria (CBN) recently commenced the disbursement of a total of N18.26 billion to five distribution and generating companies as part of its N213 billion Nigerian electricity stabilisation facility (NESF) to the power sector.
The first beneficiaries of the special CBN power sector intervention facility include the Eko Electricity Distribution Company Plc and Ibadan Electricity Distribution Company Plc which received cheques valued at N5.16 billion and N11.36 billion, respectively.
Others are the Jebba Hydroelectric Plc, Kainji Hydroelectric Plc and Shiroro Hydroelectric Plc, which also received the sums of N816.83 million, N234.81 million and N678.650 million respectively.
The loan facility, which has a 10-year repayment plan, was granted at 10 per cent interest rate.