CBN to Sanction Banks Over Electricity Stabilisation Fund


The Central Bank of Nigeria (CBN) says it would sanction any of the participating deposit money banks that violate the terms and conditions of the Nigerian Electricity Market Stabilisation Facility (NEMSF).
CBN disclosed this in a statement signed by the Director, Financial Policy and Regulation, Kevin Amugo, yesterday, said it would impose monetary sanctions as well as terminate the participating mandate of any bank that violates the terms and conditions of the CBN/NEMSF.
The CBN-Nigeria Electricity Market Stabilisation Fund (CBN-NEMSF) is aimed at settling outstanding payment obligations due to market participants under the IRP Debts as well as legacy gas debts of the Power Holding Company of Nigeria (PHCN) generation companies owed to gas suppliers and the Nigeria Gas Company, which was transferred to the Nigeria Electricity Liability Company Ltd with the objective of putting the NESI on the route to economic viability and sustainability.
CBN noted that sanctions that may be imposed are not limited to those listed as it may impose additional sanctions, and in such form as it may deem fit, to include regulatory action against officials of defaulting banks.
Recall that one year into the programme, the CBN disbursed the sum of N64 billion or 30 per cent of the facility to 18 participants. Five distribution companies received N41.06 billion; seven generating companies received N18.4 billion while six gas companies received N5.24 billion.
Also, the apex bank had in March 2015, just before the general elections, disbursed the total sum of N18.26 billion to the first batch of beneficiaries of the N213 billion NEMSF, which comprised of two electricity Distribution Companies (DISCOs) and three electricity Generation Companies (GENCOs).
The CBN in June this year, also disbursed the fourth batch of the fund, giving out N55.456 billion to 24 industry participants; three DISCOS, 14 GENCOS-NIPP inclusive, one service provider; and six GASCOS to further address the challenges of the sector.



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