The Central Bank of Nigeria (CBN) listed out sanctions to Deposit Money Banks participating in the disbursement of the N213bn Nigeria Electricity Market Stabilisation Facility, otherwise called power sector intervention fund.
The sanctions were contained in a five-page circular posted on the CBN website on Monday. The circular, dated September 1, 2016, was signed by the Director, Financial Policy and Regulation, CBN, Mr. Kevin Amugo.
According to the apex bank, ‘For various offences that may be committed by the banks participating in the CBN-NEMSF programme, the sanctions range from a penalty of N0.5m to N10m fine and/or termination of the DMB’s participation as a mandate bank’.
The infractions listed on the circular include: failure by the DMB 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.
The CBN had through the DMBs disbursed billions of naira from the N213bn power intervention fund to several power firms.
The funds were disbursed to DISCOS, GENCOS and other allied companies in the electricity value chain. Earlier this year, some power firms were presented with cheques at the CBN office in Lagos.
Six companies, comprising three DISCOs and three GENCOs, had last year received N39bn cheque at the CBN corporate headquarters in Abuja.
The CBN Governor, Mr. Godwin Emefiele, had during the event, reminded beneficiaries that the facility, which would be repaid within a 10-year period, was to enable them address challenges militating against electricity power generation and distribution.
He therefore urged them to ensure proper utilisation of the funds by investing in generation plant maintenance, transmission upgrades and distribution networks including transformers and better metering for end consumers among others.
Emefiele further expressed optimism that there would be major improvement in the generation and distribution of electricity in the country, even as he assured that the CBN would continue to make its interventions public to underscore the transparency involved in the process.
The Chairman, Nigerian Electricity Regulatory Commission, Dr. Sam Amadi, commended the CBN and the banking sector for supporting the reforms in the power sector. According to him, the disbursement would unleash the efficiency in the electricity market.
The six companies that received cheques in various sums were the Enugu, Ibadan and Kano Electricity Distribution Companies as well as the Ughelli, Egbin and Geregu Electricity Generation Companies.