Electricity Generation Companies (GenCos) in the country are de- manding for immediate settlement of over N1trillion owed by Nigerian Bulk Electricity Trading Plc (NBET).
The Association of Power Generation Companies described the debt as a huge burden which significantly threatens the viability of the GenCos, thereby undermining their ability to make further investments.
The executive secretary of the as- sociation, Joy Ogaji, told LEADERSHIP that the deal between NBET and the GenCos is such that NBET buys the electricity in bulk straight from the GenCos through Power Purchase Agreements (PPAs).
She said electricity is sold through vesting contracts to the DisCos which then supply same to the consumers.
Ogaji, however, expressed displeasure and fear about the survival of the industry, saying since 2013 NBET had accumu- lated enormous debt.
Her reaction is coming on the heels of a circular by the Central Bank of Nigeria (CBN) asking banks to take responsi- bility for collecting electricity bill payments.
Ogaji said the association was still studying the develop- ment and would make its posi- tion on the issue public soon.
In a circular dated August 21, CBN’s director of banking su- pervision, Bello Hassan, said taking over of bills’ collection from electricity distribution companies would improve payment discipline in the industry.
The CBN’s circular stated: “The payment or settlement for all NESI related goods or services shall be made through the Nigerian banking system.
“Consequently, all collections for the payments of NESI regulated goods and services provided by a DisCo shall be paid into a designated account such that collections arising from services rendered by the DisCo shall be paid into an account in the sole name of the DisCo; collections arising from services rendered by a third party/parties on behalf of the DisCo shall be paid into an account in the joint name of the DisCo and the third-party vendor(s).
“All energy and non-energy col- lections of DisCos, whether cash or cashless, shall only be performed by deposit money banks (DMBs). No entity shall be permitted to collect revenues for DisCos except if that entity is so authorised by a DMB in line with the relevant CBN guidelines for agent banking and agent banking relationships.
“Therefore, the DMB shall be permitted to authorise its agents to collect energy and non-energy payments on its behalf for any DisCo; the actions or inactions of the agent shall be the responsibility of the authorizing DMB.
Any DMB found to be maintaining any account(s) for any entity collecting payments on behalf of any DisCo without the appropriate authorization shall have regulatory actions imposed on it.”
The apex bank also directed banks providing bank guarantees to Nigeria Bulk Electricity Trading (NBET) Plc and the Transmission Company of Nigeria (TCN) on be- half of DisCos, to take full respon- sibility for the collection and the remittances of the DisCos to both NBET and TCN.
“For the avoidance of doubt, no DMB is permitted to open or continue to maintain a collection account for a DisCo without the express no-objection of the DMB that guaranteed its exposure to NBET or TCN,” CBN stated.
According to the latest quar- terly report of the Nigerian Electricity Regulatory Commission (NERC), the collection efficiency by the DisCos is low and has con- tinued to adversely impact the financial liquidity of the industry.