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CBN charges 11% interest on N213bn power loan

By on October 18, 2014

The annual interest rate to be paid by power firms on the N213bn intervention fund arranged by the Central Bank of Nigeria is 11 per cent.

According to the Nigerian Electricity Regulatory Commission, aside the initial one year moratorium and the 10-year repayment period, the power firms that access the facility will have to pay an interest of 11 per cent annually on it.

An official in the Tariff and Rates Division of NERC, Mr. Roland Achor, disclosed this in a presentation at the commission’s consultation with stakeholders on the outcome of the Aggregate Technical Commercial and Collection studies of the Enugu, Port Harcourt and Benin electricity distribution companies.

Achor explained that the CBN intervention was arranged in a way that it would not create hardship on residential customers, would mitigate rate shock, and address negative reaction from the society as well as inflation.

He added the loan would be repaid on an annual interest rate of 11 per cent until it was fully exhausted within the repayment window.

The Chairman, NERC, Dr. Sam Amadi, who was represented at the function by the Commissioner for Finance, Mr. Patrick Umeh, noted that incidences of high ATC & C loss figures reported by the distribution companies and validated by the commission indicated an urgent need for responsible use and payment for electricity in the country.

He said that NERC was more concerned about improvement in service delivery to consumers by the distribution companies.

According to him, NERC’s renewed stance on standard corporate governance practice by market participants is geared towards growth in good electricity service delivery.

Amadi had recently explained that it was expected that the transition of the electricity market in the liberalisation programme would lead to significant shortfalls in the revenue of the market.

He noted that India, Chile and Mexico had experienced similar challenges in the reform of their electricity markets and that NERC would seek for ways to redress the revenue shortfall in order to improve investment in the sector and enhance its capacity and reliability.

 

 

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