CBN suspends N213bn power intervention funds’ disbursement

The Central Bank of Nigeria (CBN) has suspended the disbursements of N213 billion power intervention funds to electricity generation and distribution firms.
The Director General, Bureau of Public Enterprises (BPE), Mr. Benjamin Dikki, made the disclosure yesterday at a joint press conference between BPE and Eko Electricity Distribution Company (EKEDC) in Lagos.
Dikki maintained that the embargo on the funds would only be lifted when the crises surrounding tariff adjustment and policy inconsistency are resolved. The joint press conference came after the BPE re-assessment visit to EKEDC, where BPE revealed reasons for the power sector’s inability to record tremendous growth, two years after privatisation.
The review of electricity tariff was, according to the BPE helmsman, strange to the apex bank and jeopardised the earlier arrangement made with the operators on the intervention fund.
CBN had earlier announced the intervention fund of about N213 billion to aid the projected investments of the private sector operators. But few months after certain disbursements have been made, the apex bank stopped the scheme, citing unfavourable operating conditions.
Dikki, who was apparently irked by the slow growth in the industry, noted that the CBN had assured to continue with the scheme only if government could guarantee a cost reflective tariff, which would in turn enable the operators pay back in due course.
In view of this, he said that the Vice President, Prof. Yemi Oshibajo, summoned the operators, including the Nigerian Electricity Regulatory Commission (NERC), to a meeting in Abuja yesterday, to examine the modalities of reviewing the electricity tariff, which is expected to be announced soon.
The BPE boss, therefore, enjoined the Federal Government to ensure clarity and consistency in policies in order to spur necessary investments in the sector.
He identified other obstacles to power sector growth as high interest rate, foreign exchange parity, policy inconsistency and implementation, and non-cost reflective tariff, among others. “When all these are put in place, I believe we will have a robust power sector,” he said.
He also urged electricity consumers to endure an increasing tariff, which, he said, would encourage the investors to make massive investment and drive the sector to an enviable status.
He noted, however, that the private sector could not solve the problems overnight, due to rots recorded over a decade, but the government and stakeholders should rather cooperate with the operators to achieve the national aspirations.
“Nigerians have to sacrifice at initial stage, so that the investment can be adequately made.
This will enable them to increase generation and distribution and prices will then continue to come down for all to enjoy,” he said. The BPE boss, however, warned the operators to desist from illegal activities and deliberate sabotaging the system, noting that the Power Purchase Agreement allowed the Federal Government to met out sanctions to them and in case of consistent violation, such erring firm would be taken over for just $1.
The Managing Director, EKEDC, Oladele Amoda, highlighted some achievements of the company in the past two years to include technology advancement, prompt fault clearing, transformer replacement, meter installation and improved workers’ welfare, among others.