NESI stabilisation: N158.7bn so far disbursed under CBN-NEMSF
REPORT on the disbursement status update of the Central Bank of Nigeria(CBN)- Nigerian Electricity Management Stabilisation Facility(NEMSF) has indicated that a total of N158.74 billion has so far been disbursed to 37 out of 40 beneficiaries.
In November 2014, the CBN in collaboration with the Ministry of Petroleum Resources, Ministry of Power and the Nigerian Electricity Regulatory Commission (NERC), signed a Memoranda of Understanding (MoU) on the CBN-NEMSF to ensure improvements in the power supply to Nigerians.
The facility, made available by the CBN in partnership with Deposit Money Banks (DMBs) in Nigeria, was intended at addressing shortfalls in power sector revenues caused by needed adjustments in electricity tariff basic gas debt and in the process reset the economics of the power sector.
However, in a latest report on the NEMSF made available at the 26th monthly meeting of power sector operators, held in Umuahia, Abia State, it was disclosed that following the maiden disbursement in February 2015, 5 batches of disbursement totaling N158.74 billion out of N210.63 billion (75% of total Facility amount) has been disbursed to date.
It stated that the latest disbursement of N38.53 billion was made on April 4, 2018.
In a breakdown, the report listed the beneficiaries to include seven electricity distribution companies( DisCos), 18 electricity generation companies( GenCos), six service providers and six gas companies.
It pointed out that although 75 percent of disbursement has been made, an outstanding of N51.9 billion was yet to be disbursed.
On the challenges stalling further disbursements, the report stated that; “Full disbursement of NEMSF has not been achieved. This is despite intentions by the CBN to achieve set objectives of the fund by paying out monies due to all beneficiaries within one year of commencement of the intervention. Kaduna and Yola Discos are yet to come on board the Facility both of which are expected to unlock N25.37 billion into the NESI value chain.”
However, it said both Discos(Kaduna and Yola) are making efforts to sign-on to the Facility by executing the NEMSF agreements adding that their participation is expected to be regularized before the end of 2nd quarter of 2018.
“NERC has committed to taking on the responsibility of ensuring that all industry operators fulfil industry related contracts which were hitherto made Condition Precedent to disbursement of the CBN-NEMSF.
“Following the ceding of this responsibility to NERC, disbursement of the Facility is no longer dependent on the fulfilment of industry related contracts.
“Also, the CBN is facilitating mechanisms/efforts to ensure that Kaduna and Yola Discos quickly come on-board the Facility. This is already yielding success and thus expected to unlock more liquidity to the NESI value chain.
CBN-NEMSF Status Update,” the report added.
Meanwhile, the GenCos had recently complained of a shortfall to the tune of N1trillion blaming this on the Nigerian Bulk Electricity Trading (NBET) who has consistently defaulted in paying them for all electricity generated and put on the national grid.
Also, the DisCos have repeatedly lamented the rate of shortfall recorded in electricity tariff payable by consumers.