• Tuesday, June 25, 2024
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BPE clarifies CBN intervention fund to power firms

CBN’s new FX rules to shore-up dollar supply, stabilise naira

Benjamin Ezra Dikki, the director general of Bureau of Public Enterprises (BPE), has clarified that the N213 billion intervention fund recently released by the Central Bank of Nigeria (CBN) to power generation and distribution companies in the country is not a grant but revenue accruing to the companies.

At the conception of the power sector reforms in Nigeria, it was calculated that 40-60% of power generated was lost due to technical faults and inefficiencies in transmission and distribution occasioned by inadequate investment and poor maintenance culture.

These losses that no private sector investor will bear were made good by government via subsidies over an initial three-year period to give private sector investors time to make the necessary investments to improve the distribution network.

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Due to revenue challenges, the government could not meet the obligation; hence the CBN decided to intervene and grant a loan to the power sector market.

The fund, according to Dikki, is a loan to the power market to enable investors improve infrastructure and the role of CBN, BPE and the Nigerian Electricity Regulatory Commission (NERC) would be to monitor the utilisation to ensure that the power infrastructure improvement was achieved within the next five years, and that the loan is repayable by the market over a period of ten years.

The greatest challenge facing power generation in the country is gas which the previous administrations did not tackle until the President Goodluck Jonathan’s administration came to salvage the situation.