The financial discipline introduced by the Central Bank of Nigeria (CBN) in the power sector has achieved desired results , especially in terms of transparency in revenue collection. ADEOLA TUKURU reports.
Some experts and consumers have described as game-changer the CBN interventions which is expected to bring about financial liquidity in the power sector and help in revenue efficiency and collection.
Data obtained from the apex bank indicates that the interventions include, Power and Aviation Intervention Fund (PAIF), hovering at about N300 billion, Nigerian Electricity Market Stabilisation Facility (NEMSF), standing at about N213 billion, N140 billion Solar Connection Intervention Facility, over N600 billion tariff shortfall intervention as well as a recent N120 billion intervention designed for mass metering among others.
The objectives of the N300 billion CBN fund
Power and Aviation Intervention Fund (PAIF), is to improve power supply, generate employment and enhance the living standard of the citizens through consistent power supply.
Other objectives are provide leverage for additional private sector investments in the power and aviation sector, fast track the development of the aviation sector of the Nigerian economy by improving the terms of credit to Airlines as well as fast-track the development of electric power projects, especially in the identified industrial clusters in the country.
Some power consumers who spoke to Blueprint said they have been suffering under the burden of estimated billing.
Mr Badru Oluseye, a consumer, said some Nigerians are paying for electricity they did not consume because of the estimates billing system, stressing that the CBN intervention should be able to put an end to that if well utilized.
Experts laud CBN
Some industry experts, also noted that the apex bank deserves commendation on the interventions, especially the level of transparency on the initiatives stating that repayment plan remained a critical issues as well as feasible impacts.
While lauding the development, PwC’s Associate Director, Energy, Utilities and Resources, Habeeb Jaiyeola said it remained the right step given the fact that current installed capacity for the generation companies in Nigeria remained low, the inability of the DisCos to completely distribute and collect payment would continue to hinder the ability of the country to fully leverage the installed capacity.
Pay back must be enforced
According to him, the CBN intervention remains a positive tool for the development of the sector, adding that the payback has to be enforced to ensure the fund remains available for further critical interventions.
Fund to aid DisCos
On his part, energy expert, Michael Faniran, said without government intervention in bridging the metering gap, DisCos may not show the willingness to end arbitrary billing of consumers.
He explained that there is a critical need for government to support infrastructure development in the sector, adding that without the infrastructure that would reduce collection challenges the sector would not be able to fund gas and other links in the sector.
The President, Nigeria Consumer Protection Network, Kunle Olubiyo also explained that given the level of financial liquidity in the sector, support in terms of soft loans would provide leeway for the sector.
According to him, the schemes and financial interventions remained laudable but demand urgent review, especially with supporting policies that would drive holistic results from the programmes.
Some experts, in a document authored by the legal firm’s partner, Dayo Okusami and Senior Associate, Moses Pila, advised that the the CBN may opt to either provide further capitalization to NBET or some form of payment support to enable NBET adequately meet its payment obligations under its power purchase agreements.
Need to aid GenCos
According to them, this will in turn enable the generation companies to meet their payment obligations to their gas suppliers. The CBN may also choose to provide a special foreign exchange dispensation to the power sector to mitigate the challenges.
They further said the CBN can exert regulatory influence over the conduct of the commercial banks regarding the DisCos’ revenues and ensure the sanctity of collections and the priority of the remittances to the electricity market.