The Nigerian Electricity Regulatory Commission (NERC) has disclosed that operators in the power sector have already accessed about 50 per cent of the N213 billion market-based intervention fund provided for the sector by the Central Bank of Nigeria (CBN).
Speaking at a Senate probe recently on the past expenditures of previous governments in the country’s power sector, Sam Amadi, NERC’s chairman, explained that due to stringent key performance indicators (KPIs) attached to the fund by the CBN, only about half of the fund has so far been applied for and obtained by electricity generation and distribution companies, as well as other participants in the value chain.
Amadi said, “50 per cent of the CBN fund has been disbursed so far because of key milestones needed to guarantee that the CBN key performance indicators are adhered to by operators in the sector.”
He further stated that the sector’s zero credibility with gas suppliers had necessitated that a proactive measure such as the CBN intervention be initiated, adding that the fund was also justified by the existence of other liquidity challenges that threatened the operations of the sector last year.
On the impact of the intervention to power supply in the country, Amadi explained that the supply of gas to generation companies has grown from what it used to be, thus translating into improved power generation.
“When we get to 6,000 megawatts (mw), we will be quite comfortable to focus on addressing our regulatory challenges and strengthening the capacity of the sector. In the next couple of years, we hope that about 2000mw will come from coal power generation and from then, we should be adding an average of 2000mw annually to our capacity,” he added.
On metering, he noted that metering as a legacy challenge of the sector was receiving accelerated policy push, saying: “Going forward, there will be an aggressive metering of consumers because of the ongoing measures like the cost reflective tariff, federal government and CBN interventions.”
The CBN fund is designed to settle the legacy gas debts of the sector to gas suppliers, which stands at N36 billion.
It is also targeted at executing agreed metering programmes and procurement of transformers by distribution companies as well as the maintenance programmes and procurement of equipment by generation companies.
The intervention fund, according to the government at its earlier announcement, would be provided by the CBN in collaboration with deposit money banks and managed by a dedicated fund manager.
Accordingly, beneficiary companies will repay loans obtained from the fund with a first-line charge on their revenues over a 10-year period.