Posted by News Express | 6 September 2016 | 1,643 times
For banks participating in the N213 billion power sector financing, the Central Bank of Nigeria (CBN) has warned that acts of sabotage would be followed with commensurate penalties.
The CBN, therefore, listed 18 infractions, which it circulated yesterday to banks participating in the scheme.
This action of the apex bank intended to remove bottlenecks responsible for low power generation.
Some participating banks are yet to fulfill their December 22, 2014 agreement with the apex bank with regards to releasing funds to generating and distributing companies by the first week of last year.
This situation is therefore frustrating investors plan to upgrade their processes aimed at effective and efficient delivery of electricity.
In a circular titled: “Sanctions Grid to Deposit Money Banks that participate under the CBN – Nigeria Electricity Stabilization Facility (CBN-NEMSF)” by its Director in charge of Financial Policy and Regulation Department, Mr. Kevin N. Amugo outlined penalties – ranging from warning, to fines to the tune of N500,000 daily – for infractions.
Fourteen money deposit banks are participating in the refinancing scheme, in which the World Bank offered to guarantee $1.75 billion lifeline, representing a total of $7 billion budgeted for Nigeria over a four-year period.
While some generating companies and distribution firms were presented with disbursement early in 2015 to meet some of their obligations, others since then have remained unable to access the facility.
It was not clear yesterday if the World Bank’s facility too was being hampered.
Its Nigeria Country Energy Task Team Leader, Mr. Eric Fernstrom, who announced the assistance in December 2014, noted that the Bank was greatly encouraged to offer the additional assistance to ensure that the reform objectives were realised.
On November 18, 2014 the CBN equally signed a MoU with the key players in the power sector on the financing, which is under the CBN’s Nigerian Electricity Market Stabilisation Facility (NEMSF).
The agreement, which was a the fallout of the collaborative effort of the CBN, the Federal Ministries of Power and Petroleum Resources and the Nigerian Electricity Regulatory Commission (NERC), was structured to find solution to the challenges in the electricity sector despite the handover of power firms to new owners.
•Text courtesy of The Guardian. Photo shows CBN Headquarters.