The Central Bank of Nigeria (CBN) has unveiled the terms and conditions for accessing the N213billion Electricity Market Stabilisation Facility (CBN-NEMSF) which was recently approved for the power investors.
The CBN said the facility has a tenor of 10 years, with moratorium period of 12 months on the principal.
The bank in a 20-page document posted on its website yesterday, explained the mode of funding the facility, saying that it subscribed to a note issued by the refinancer in the total sum of the facility amount.
Furthermore, it demanded that the refinancer shall refinance the facility by repaying the lenders in proportion to each lenders’ commitment, in accordance to the Disco Disbursement Refinancing Agreement and the amended and restated Disco Disbursement Agreement.
“The facility will attract an all-inclusive charge of 10 per cent per annum on the outstanding balance and payable monthly in accordance with the transaction document,” it stated.
According to the document, the terms and conditions shall remain effective until full payment of the facility.
“The security to be provided for the CBN-NEMSF shall be by way of a declaration of trust as set out in the amended and restated Disco Disbursement Agreement, over the line item in the invoices issued by the Disco representing the collection of the facility which has been provided in the MYTO 2.1 for the repayment of the facility and an obligation on the Discos to ensure such collections,” it added.
Following the handover of the PHCN successor companies to private investors in November 2013, the Nigeria Electricity Supply Industry (NESI) was laden with liquidity challenges as a result of several factors including insufficient gas supply and higher baseline aggregate technical commercial collection losses than what was assumed under the MYTO two.
This necessitated the central bank, in pursuant the CBN Act 2007 to invest in the refinancer to be set up to provide the facility.
