November 24, 2014 – Central Bank of Nigeria (CBN), Ministry of Petroleum Resources, Ministry of Power and the Nigerian Electricity Regulatory Commission (NERC) have signed a memorandum of understanding MoU to stabilise power supply tagged the CBN-Nigeria Electricity Market Stabilization Facility (NEMSF).
Under the MoU, CBN in collaboration with Deposit Money Banks(DMB) will provide facility to address the shortfall in power supply.
Speaking at the ceremony in Abuja, CBN Governor, Mr. Godwin Emefiele, said the facility would kick-start the electricity market in order to ensure that the power sector delivers tangible improvements in power supply for the benefit of all Nigerians.
According to him, the CBN, in partnership with Deposit Money Banks (DMBs) in Nigeria, would provide the facility to address shortfalls in power sector revenues caused by needed adjustments in electricity tariff basic gas debt and in the process reset the economics of the power sector. He added that the facility would be repaid in the life-time of the rest electricity tariff.
He therefore charged the benefiting companies to ensure they repay the facility as and when due. He called on them to invest the funds in generation plants maintenance, transmission upgrades and distribution networks.
While commending President Goodluck Jonathan for his support for the process and other players in the sector for their commitment, he emphasized that more still needed to be done to ensure that the nation gets to the finish line of the process.
Also speaking at the occasion, the Minister of Petroleum Resources, Mrs. Dieziani Allison-Madueke expressed delight that the interventions in the power sector were yielding the desired results.
She commended CBN-led intervention in the sector, which has settled legacy debts totaling N36.9 Billion which PHCN owed gas suppliers.
Going forward, she said appropriate security mechanisms will be put in place to ensure that gas sold to the power sector is paid for. She said gas suppliers, in reciprocating the gesture, had made a commitment to ensure that they supply enough gas to power plants.
In his remarks, the Minister of Power, Professor Chinedu Nebo, describedthe process as tortuous and grueling, but was happy that the synergy among the major players had translated into the tremendous progress made in the power sector since the privatization process in 2013.
Nebo thanked President Jonathan for his leadership in ensuring that the process was seen through. He also commended the scope and speed of the intervention championed by the Central Bank of Nigeria.
The representative of the Chairman, Nigerian Electricity Regulatory Commission (NERC), Dr. Sam Amadi, Dr. Eyo Ekpo lauded the collaborate effort among the key players in establishing a firm foundation for the Nigerian power sector.
According to him, through such collaboration, the power sector in Nigeria is now an enabler and not a disenabling sector.