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Distributors to Senate: Reconsider stopping bond for electricity companies

By News Express on 24/10/2016

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The Association of Nigerian Electricity Distributors (ANED) on Sunday appealed the National Assembly to reconsider stoppage of bond for electricity companies to avoid collapse of the power sector.

Mr Sunday Oduntan, the Executive Director, Research and Advocacy of ANED, made the appeal in a telephone interview with the News Agency of Nigeria (NAN).

Oduntan said that the sector had a huge liquidity gap, which was being bridged by Federal government’s intervention in form of bond, adding that electricity consumers longer show willingness to pay bills.

“Government’s ministries, departments and agencies owe the sector over N100 billion electricity bills.

The executive director said that bond was a form of promissory notes given to power sector in form of loan to cover some shortfalls in the industry.

He told NAN that electricity Distribution Companies (DISCOs) had no chances of obtaining bank loans because banks believed that it would be difficult to recover loans given to them.

“We are appealing to the senate to revisit its stand on stoppage of bond for electricity companies.

“At present, electricity companies need bond to balance the liquidity gap in the sector.

“Government is assisting the sector through this medium.

“With stoppage of this intervention, DISCOs will find it difficult to buy new transformers and meters, while Generation Companies (GENCOs) will not have resources to service their plants.

“The stoppage of this bond will contribute to collapse of the power sector.”

NAN reports that on Oct. 12, the senate passed a resolution stopping the Federal Ministry of Power, Works and Housing from using the Nigeria Bulk Electricity Trading Company (NBET) to give electricity companies a N309 billion bond. (NAN)

•Photo shows Senate President Bukola Saraki.

Source News Express

Posted 24/10/2016 05:05:05 AM

 

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