The Central Bank of Nigeria in a bid to resolve the liquidity challenges in the power sector on Monday disbursed a total loan of N18.26bn to five power firms.
The power distribution firms that got the N18.26bn loan are the Ibadan Electricity Distribution Plc which received the highest amount of N11.36bn; while Eko Electricity Distribution Plc followed with N5.16bn.
For the generation companies, Jebba Hydroelectric Plc received the highest chunk of N816.83m while Kainji Hydroelectric Plc and Shiroro Hydroelectric Plc followed with N678.85m and N234.81m respectively.
The amount which was given at an interest rate of ten per cent, with a repayment period of ten years, is part of the N213bn Nigerian Electricity Market Stabilisation Facility.
Speaking at the loan disbursement ceremony which was held at the headquarters of the apex bank in Abuja, the CBN Governor, Mr Godwin Emefiele described the facility as a major initiative to reset the economics of the power sector.
He urged the firms to utilise the funds in upgrading their power infrastructure and warned them against diverting the loan for other operational activities not contained in the loan agreement.
A total of three power generation companies and two distribution companies had their respective Chief Executive Officers in attendance during the disbursement.
The disbursement of the loan is a follow up to the Memorandum of Understanding which was signed last December between the apex bank, participating Deposit Money Banks and the Nigerian Electricity Regulatory Commission.
The December agreement was to prepare Deposit Money Banks to channel the funds towards de-risking the value chain in the electricity supply market.
