11 DisCos obtain ₦273.34 billion credit facility for meter purchase

Electricity Distribution Companies have obtained loans worth ₦273.34 billion under the Nigerian Electricity Market Stabilisation Facility (NEMSF) intervention project to purchase meters for distribution.

The NEMSF was developed to clear all outstanding payment obligations due to the industry stakeholders and legacy debts owed by the Power Holding Company of Nigeria (PHCN) to gas suppliers.

According to a CBN report which gave a breakdown of the ₦10.3 trillion developmental finance budget between 2015 and 2022, the ₦273.3 billion loan obtained by the DisCos was used to provide 414,000 prepaid meters made up of Maximum Demand meters, Smart meters, and Single-Phase meters.

Part of the funds was also put into measures to improve power supply by increasing electricity capacity from 3,400 megawatts, MW to approximately 4,900MW.

The credit facility was made possible via a collaboration between the CBN with the banking sector, as a means to cushion the recent shortfalls in the power sector income caused by factors such as gas shortages, pipeline vandalism, inadequate funding, unprofitable prices and corruption.

A breakdown of the DisCos that benefited from the credit facility showed that Ikeja Disco received ₦40.74 billion from the intervention programme while the Eko Disco received ₦34.85 billion.

Also, ₦34.69 billion was obtained by Abuja Distribution Company, Ibadan Disco obtained ₦27.73 billion, Enugu Disco borrowed ₦27.84 billion, while Kaduna Disco borrowed ₦24.36 billion.

The report also highlighted key issues that hindered operations in the power sector, including an inefficient market characterised by market liquidity challenges, foreign exchange scarcity, and inadequate electricity distribution infrastructure.

The intervention in the power sector over the years has raised dust as lawmakers have queried the non-repayment of these loans which have been obtained by the DisCos.

The House of Representatives Public Accounts Committee (PAC) in November last year, summoned the CBN and the 11 DisCos to explain the usage of the $321 million and ₦18.2 billion loans disbursed for the accelerated transmission distribution interface, lines and substation projects.