• Sunday, December 10, 2023
businessday logo


Reps summon DisCos, CBN over $344m loans for electricity projects

Reps reject representatives as Service Chiefs, IGP shun invitation

The House of Representatives on Public Accounts Committee (PAC) on Thursday resolved to summon the Central Bank of Nigeria (CBN) and 11 Electricity Distribution Companies (DISCOs) over $321 million and N18.2 billion loans for the accelerated transmission distribution interface, lines and substation projects.

Bamidele Salam, the Chairman of the PAC who gave the order when Engr Sule Abdulaziz, the Managing Director of the Transmission Company of Nigeria (TCN) demanded They to appear before the Committee ton November 8th, 2023.

Read also: Tinubu proposes N2tn recapitalisation of Discos, tariff review

Salam explained that their summon was sequel to a petition on lack of judicious use of the funds, which were paid to the DISCOs by the CBN on prompting of the TCN.

PAC Chairman told the TCN to provide details of disbursement of the loans, procurement process, how many DISCOs were involved, the stage of the projects, and the structure of the repayment of the loans to the beneficiaries of the loan.

“Sometime in 2021 the then president Muhammadu Buhari granted that certain funds be made available for the purpose of enhancing the capacity of our transmission and distribution lines to be able to have a more robust power sector intervention and these funds were made available for certain projects to the distribution companies.

“It is the concern of the petitioner that the fund have not been judiciously used and that the project ought to have been delivered by now upon which we caused a letter to be written to the Transmission Company of Nigeria which also sent in a response stating the status report of the project as well as the procedure for the implementation of that loan disbursement and execution of the project by the distribution companies.

“Our concern is to ensure that all our institutions work well in accordance with the law and in accordance with global best practices and to ensure money is judiciously utilized” he added.

Abdulaziz, Managing Director of the Transmission Company of Nigeria (TCN) in his submission told the Committee that the funds were paid directly to the DISCOs by the CBN to embark on the various projects, saying the repayment of the loans was from the revenue of the TCN.

Abdulaziz said there was a gap in the electricity sector and the distribution companies were complaining that the TCN was not giving them supply, noting that there was a need to invest in some projects so that the distribution companies would be able to distribute light to Nigerians.

“But it was observed that TCN does not have that amount to do those projects, so the FGd involved the CBN as the people to finance the projects. NERC being the regulator now is the one leading the exercise. TCN is just a beneficiary of the project. It is signed by the DISCOs. In TCN there is a Project Monitoring Office that was set up to do this procurement.

However, his submission did not sit very well with the Committee who expressed concern over the repayment arrangement.

Engr Edmond Eje, the TCN Market Operator, addressing the Committee said said a total of 125 projects were identified and agreed upon in the tripartite engagement which NERC oversaw engagement between TCN and 11 DISCOs to align on a list of critical interface projects that would significantly increase TCN’s capacity to unlock DISCOs energy demand in critical load centres.

Read also: DisCos revenue jumps to N515bn in H1, highest in 9 years

“The Commission approved the project list of 125 projects as well as the securing of financing from the CBN for the same project to the tune of about N122.3 billion in loan.

“The TCN and the 11 distribution companies set up a multi stakeholder project management office that was responsible for undertaking the procurement and eventual monitoring and evaluation of the project to implement the DISCO intervention.

“DISCOS are the beneficiaries and took it on behalf of TCN to execute projects. At the end of the day, it was scheduled that from TCN’s revenue, these loans would be amortized from source.

“In order words on monthly basis, each of these monies sent to the contractors would be amortized though our revenue” he added.