Chineme Okafor in Abuja
The financial support provided by the Central Bank of Nigeria (CBN) to Nigeria’s power sector is set to hit a total of N1.695 trillion, making it the single largest creditor to the sector, an analysis of a report obtained from the apex bank by THISDAY has disclosed.
THISDAY gathered from the CBN annual’s report for 2018, that as at the end of 2018, it had granted total credit of N1.095 trillion to the power sector under the three different schemes it set up.
The schemes included the Nigerian Electricity Market Stabilisation Facility (NEMSF), which was made to settle outstanding payment obligations due to market participants during the interim rules of the market as well as legacy debts owed by the Power Holding Company of Nigeria (PHCN) to gas suppliers; the Power and Airline Intervention Fund (PAIF); and the Payment Assurance Facility (PAF) extended to the Nigerian Bulk Electricity Trading Plc (NBET) to settle invoices of generation companies (Gencos) to a minimum level of 80 per cent.
However, with the bank also expected to provide additional N600 billion as proposed by the NBET in its report of the implementation of the N701 billion PAF, which THISDAY exclusively reported, its total credit to the sector would hit N1.695 trillion.
According to the CBN document, the sum of N62.88 billion was disbursed to 37 projects in the power sector in 2018, under the NEMSF, and this brought the cumulative disbursement since inception of the facility in 2014 to N183.09 billion.
It further stated that the total of N14.89 billion was repaid by 11 Discos during the review year, bringing the cumulative repayment since inception to N30.46 billion.
Listing what had been achieved in the sector through the NEMSF, the CBN said that significant capital expenditure (capex) in the industry, leading to recovery of generating capacity of more than 1,200MW in both hydro and thermal plants through the overhaul of turbines was recorded.
“Execution of capacity recovery programme was carried out in three hydro power stations as follows: intake under water repair project, overhaul of Unit 4 and compliant metering/supplementary protection at Shiroro Dam; overhaul of 2G6 at Jebba Hydro; and rehabilitation of three units at Kainji Dam.
“Rehabilitation of 10 gas turbines at major thermal power plants, including Geregu, Transcorp Ughelli, and Ibom Power Plants,” it explained.
Also on the achievements recorded in the NEMSF implementation, the apex bank stated that the scheme enabled Discos to carry out projected capex through issuance of letters of credit (LCs) for the purchase of over 704,928 meters; rehabilitation of over 332 kilometres (km) of 11 kilovolt (kV) lines and 130km of 0.45KV lines; 511 transformers purchased and installed and construction of 56 new distribution substations as well as acquisition of a mobile injection substation.
With regards to the PAIF, the bank noted that N21.99 billion was released to the Bank of Industry (BOI) for five power projects under the facility.
“These were the Kano Hydro Power Project (N3.01 billion); Ashaka Cement Limited (N6.75 billion and N3.25 billion); Azura Power Project (N4.93 billion); and Para Energy and Natural Resources Development Limited (N4.05 billion).
“By end-December 2018, the cumulative amount released to the Bank of Industry (BOI), under the intervention, stood at N301.37 billion, out of which N180.61 billion was disbursed for 45 power projects and N120.76 billion to 24 airline projects,” said the CBN.
It equally explained that repayments within the year stood at N25.69 billion, comprising N10.19 billion from airline projects and N15.50 billion from power projects, with cumulative repayment from inception in 2010 standing at N145.52 billion, of N71.13 billion for airline and N74.39 billion for power projects.
As for achievements recorded through the PAIF, it stated that: “A total of 1,398.8MW of power was financed under the scheme. The Fund also financed the construction of 120 kilometre natural gas pipeline from Ikpe Anang in Akwa Ibom State to Mfamosing in Cross River State.”
For the NBET’s PAF, it stated that it was a bridging facility, adding that through it, the NBET provided a minimum level of payment to power Gencos to enable them to meet their obligations to gas suppliers.
“The aim of the facility is to support increase in the level of power generation in the country. A total of N424.49 billion was paid for invoices in the review year. This comprised N183.17 billion paid to Gascos (gas companies); Gencos, N234.59 billion; equipment suppliers, N132.33 million; and withholding tax, N6.60 billion. Cumulatively, the sum of N534.18 billion had been paid, under the intervention, since its inception,” it explained in the report.