The Association of Nigerian Electricity Distributors Power (ANEDP), lead group for power distribution companies in the country has cried out to government and chronic debtors that their greatest impediments towards accessing additional bank loans remains the backlog of N152.16b owed members.
ANEDP said the facility known as ‘Nigeria Electricity Market Stabilisation Fund’, was for the payment of gas and other legacy debts incurred before private investors took over the assets of the defunct Power Holding Company of Nigeria on November 1, 2013.
According to the Director of Research and Advocacy, Mr. Sunday Oduntan, a breakdown of the loan indicated that only N58.45bn, or about 27.8 per cent, was designated for the Discos, while the balance of N152.16bn was for the power generation companies, gas suppliers and other service providers.
Though the said loan is arranged to be paid in parts in a 10 year moratorium understanding, the amount designated for the Discos, which is only N49bn had been received by some of the firms out of the N120bn disbursed by the Central Bank of Nigeria (CBN) since it commenced disbursements in 2015.
But according to Oduntan, even though the N152bn balance was not for the Discos, the financial books of the electricity retailers bear the debt burden which had become a clog in ANEDP’s wheel of progress.
He argued that “The debt encumbrance is a significant impediment to the Discos’ ability to borrow money to finance their capital investments and their financing of the entire value chain”.
He added further that the inability of the apex bank to make this clarity before the participating commercial banks has created a room for banks to see power distributors seeking for loans as not eligible after all.
Analysts say the scenario may continue to delay the planned investments by Discos in growing power stability in the country for long.