The Central Bank of Nigeria (CBN) has made several giant strides aimed at the survival of the power sector. The CBN’s intervention is majorly in the aspect of liquidity provision to stabilize the sector; these are evident in the Nigeria Bulk Electricity Trader (NBET) loan facility and the Nigerian Electricity Market Stabilisation Facility (NEMSF).
These giant strides were captured in the NEMSF progress report, presented at the 27th power sector monthly meeting to stakeholders and operators in the industry.
The report enumerated that the country’s apex bank had paid about N24bn to gas suppliers to ease the power sector gas constraint, and also rehabilitated some substations and over 2,000km of 11kv lines and 130km of 0.415kv lines.
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The report stated that; “the purchase of 704,928 metres through the facility, purchase and installation of over 500 transformers to enhance the distribution networks, and over 2,000km of 11kV lines and 130km of 0.45kV lines were rehabilitated.”
It added, “More than 1,000 megawatts of generation capacity was recovered, 56 substations were rehabilitated/constructed, and over N24bn has been paid to gas suppliers to ensure adequate supply of gas to the Nigerian power sector.”
The report stated that it was the apex bank’s aim to also bring about a contract-based electricity market where participants were being governed by market rules and instill discipline, as well as facilitate tangible improvement in power supply across the country.
On disbursements and repayments from the NEMSF as of May 14, 2018, the report stated that the total amount was N210.63bn, out of which N158.74bn had been disbursed, representing 75 per cent of the fund. It added that N19.35bn had been repaid, leaving an outstanding balance of N139.39bn.
The apex bank said, “The outstanding disbursement of N51bn under the facility is mostly as a result of the Kaduna and Yola Discos that are yet to fully sign on to the facility. Efforts to sign on these Discos are already been intensified as both Discos have made remarkable progress in this regard.”
It noted that the core objectives of the facility was to reset the economics of the power sector by way of providing liquidity to the industry by settling the debt overhang that arose during the interim rules period as a result of revenue shortfalls during that time.
“The CBN is desirous unlocking more liquidity into the industry and is providing the necessary support to these Discos to ensure that they are on-boarded to the facility within the year.”