The power sector is one of the most challenged in the country and the intervention fund worth N213billion was initiated in 2014 to tackle three major challenges in the sector including inadequate gas supply for power generation, the inability of generation companies to produce electricity with reduced volumes of gas and misalignment between electricity tariff and the true cost of running the electricity business. The then Minister for Petroleum Resources, Diezani Alison-Madueke announced at the time that the Central Bank of Nigeria was to provide the funds in collaboration with deposit money banks and was to be disbursed by a fund manager.
Two years after, the power sector is yet to see any improvement and power supply has in fact, worsened over the years. The Senate President, Bukola Saraki, on Saturday has made it known that the Senate will probe the disbursement of the N213billion power sector intervention fund.
Here are 5 things to know about the situation:
- The N213million fund facility was borne out of the need to rescue the power sector from the shortfall in expected revenue that was experienced after the sector was privatised. Loans were intended to be granted to power generation and distribution companies to support in the procurement of facilities such as turbines, meters and transformers.
- The beneficiary companies (DISCOS, GENCOS and other allied companies in electricity provision) were supposed to repay the loan over a 10 year period with 10 percent interest.
- In May 2016, the companies made another request for N309billion worth of loan prompting the National Assembly to begin investigations into the disbursement of the N213billion intervention fund. At that time, the CBN had made a disbursement of over N18billion to the first set of beneficiaries, yet no one could make account for how that was utilised as power supply declined and new requests were again being made.
- In September 2016, the CBN sanctioned the deposit money banks involved in the direct disbursement for various offences including failure to provide statement of accounts maintained by the electricity distribution companies to the refinancer/administrator; allowing revenue to be paid into a bank accounts different from the Feeder Collection Accounts; and allowing withdrawals or debits from the Feeder Collection Account by a non-Principal Collection Account.
- This newly announced probe is to be conducted by the senate committee on power, steel development and metallurgy. The committee will be looking into the activities of the Bureau of Public Enterprises (BPE) to check its ineffective supervision and audit of the companies who have benefited from the intervention fund.