Power distribution companies fret over N34.05bn debt

August 27, 2019
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Power distribution companies are said to pulling available strings to avoid serious sanctions from the Nigerian electricity Regulatory Commission (NERC) following unpaid N34.05bn loan disbursed under the Central Bank of Nigeria-Nigeria Electricity Market Stabilisation Facility programme (CBN-NEMSF).

National Daily gathered that the DisCos have been given ultimatum to repay the loan before the end of this year.

Recall that in November 2014, the CBN, the Ministry of Petroleum Resources, the Ministry of Power and NERC signed a Memorandum of Understanding (MoU) on the CBN-NEMSF to address the shortfalls in the revenue of the power sector.

With N213 billion earmarked for disbursement through Deposit Money Banks (DMBs), billions of naira has been disbursed under the programme to the power firms, including generation companies.

Following the exit of the core investor as a result of the insecurity in the North-East region of the country, the Federal Government, in July 2015, took over Yola Electricity Distribution Company after it declared a force majeure.

The power sector regulator said it had confirmed N1.15 trillion as the tariff shortfall suffered by the 11 DisCos from 2015 to 2018.

According to NERC, power distribution companies (DisCos) would repay N34.05 billion of the loan disbursed under the Central Bank of Nigeria-Nigeria Electricity Market Stabilisation Facility programme (CBN-NEMSF) before the end of this year.

This was disclosed in the NERC’s 2016-2018 Minor Review of Multi-Year Tariff Order 2015 and Minimum Remittance Order for the Year 2019 for the Discos.

The breakdown shows that Enugu Electricity Distribution Company is expected to repay N5.57 billion to the CBN this year, while Abuja DisCo is expected to pay N4.95 billion; Benin DisCo, N4.89 billion; Ibadan DisCo, N4.58 billion; and Port Harcourt DisCo, N3.38 billion.

Similarly, Kaduna DisCo is expected to repay N3.34 billion; Jos DisCo, N2.68 billion; Kano DisCo, N1.76 billion; Ikeja DisCo, N1.75 billion; and Eko Disco, N1.03 billion.

According to the NERC, Yola DisCo, which was returned to the Federal Government by the core investor in 2015, has the lowest payment obligation of N61 million.

NERC, however, disclosed that the DisCos would only be availed the opportunity to earn their revenue requirements only after meeting the payment obligations including the repayment of the CBN-NEMS facility and 100% settlement of the market operator’s invoice based on the tariffs it applied in determining respective invoices prior to the order.

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