CBN disburses N120bn to tackle DISCOs funding challenge

The Central Bank of Nigeria (CBN) has stepped in, to address the liquidity and funding challenges facing the power sector, by disbursing a total of N120.2 billion to players in the sector.

In a statement Wednesday, the CBN said different electricity distribution companies (DISCOs), power generating companies (GENCOs), service providers and gas companies were benefiting from the facility.

The fourth tranche of the disbursement, which is under the N213 billion Nigerian Electricity Market Stabilization Facility (NEMSF), was made in Lagos.

The current tranche disbursed a total of N 55.5 billion to 24 industry participants including three DISCOs, 14 GENCOs, one service provider and six gas companies.

Godwin Emefiele, governor of the CBN, while speaking at the disbursement ceremony, expressed the commitment of the Bank to support the power sector in order to solve the electricity supply challenges of the country.

Emefiele explained that the “fourth tranche disbursement marked a major milestone in the effort of the bank, in collaboration with the federal government, to achieve a contract based electricity market”.

The event featured the signing of power purchase agreements by the Nigerian Bulk Electricity Trader (NBET) to signal activation of industry contracts for power generation under a contract based market.

The first disbursement under the NEMSF scheme was effected on February 12, 2015 to different players in the sector, with the CBN saying the “intervention resulted in the restoration of a total of 905MW of power into the national grid”.

The bank said specific reports from generating companies shows that there was execution of capacity recovery programmes in three hydro power stations.

It said the process included the underwater repair project, overhaul of Unit four and compliant metering and supplementary protection at Shiroro Dam.

A total of 300MW capacity increase was reported as a result of fund utilization towards rehabilitation of both plants, the bank said.

Others were rehabilitation of seven gas turbines at three major thermal Power Plants namely Geregu, Transcorp Ughelli, and Ibom Power Plants.

CBN added that the intervention has also enabled DISCOs to provide bank guarantees to the Nigerian Electricity Bulk Trader (NEBT); purchase of over 171,071 units of meters comprising both maximum demand and single phase meters; 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.

Babatunde Fashola, the minister of power, works and housing, commended the CBN for its intervention to help resolve the issues in the power sector.

He also called on those involved in the vandalism of gas pipelines to desist from such as it was neither in the interest of the country nor in the interest of oil producing communities as a result of spillage, pollution and other consequences.