The Central Bank of Nigeria, CBN, has shelved the disbursement of the N213 billion intervention fund for the power sector, the Bureau of Public Enterprises, BPE, has revealed.
The fund was introduced as a loan facility to assist power generating companies, GENCOs, and the distribution companies, DISCOs, to settle their gas debts, execute agreed metering programmes and finance procurement of transformers.
BPE’s Director General, Mr. Benjamin Dikki, who disclosed this in Lagos, said CBN suspended the disbursement of the fund as a result of the Nigerian Electricity Regulatory Commission, NERC, planned upward review of electricity tariff by 40 percent.
Describing the planned tariff review as “strange,” he noted that it was not included in the agreement for the disbursement of the fund when it was introduced in 2014.
The BPE boss noted that the upward review of electricity tariff by 40 percent when implemented, in addition to the CBN intervention, might lead to over-funding of the power sector, hence the CBN decision to suspend further disbursement of the fund.
About 50 percent of the N213 billion intervention fund has already been disbursed to some GenCos and DisCos prior to the CBN decision.
It was not clear, and Dikki did not explain, what would happen to the funds already in the hands of the GenCos and DisCos, if NERC proceeds with its upward tariff review.