Power distribution companies in the country on Monday said part of the N201.6bn Central Bank of Nigeria loan reflecting on their accounts had been an impediment to their ability to borrow money to finance capital projects.
According to them, the CBN’s N152.16bn loan reflecting on their accounts has blocked their access to additional funding from commercial banks.
Speaking under the aegis of the Association of Nigerian Electricity Distributors, the umbrella body for the Discos, the power firms said the loan, which was tagged: ‘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.
The Director of Research and Advocacy, ANED, Mr. Sunday Oduntan, said a breakdown of the loan showed 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.
The loan, he said, would be repaid in bits during a 10-year period by the beneficiaries.
Oduntan noted that of the amount designated for the Discos, only N49bn had been received by some of the firms out of the N120bn disbursed by the CBN since it commenced disbursements in 2015.
He lamented that although the N152bn balance was not for the Discos, the financial books of the electricity retailers bear the debt burden.
“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,” Oduntan explained in a statement issued in Abuja.