Power distribution companies will not be allowed to increase electricity tariff as they work to repay the Central Bank of Nigeria’s N213bn facility earmarked for operators in the power sector according to the Nigerian Electricity Regulatory Commission (NERC) reports The Punch.
The Federal Government recently announced a N213bn facility to assist operators in the sector offset the huge legacy gas debts and redress their revenue shortfall in order to improve investment in the industry.
The Chairman, NERC, Dr. Sam Amadi, however said the regulator was never focused on increasing tariff.
He said, “If anything, the regulator wants to keep the tariff lower than it could be. That is why we are a consumer protector. Our mandate in the law is to ensure that the operators are efficient, and when they are efficient, we allow them to charge the price that enables them to recover the reasonable and prudent cost of serving the customer”.
He explained that the CBN fund would help to provide quick money that the power companies would pay with a longer tenor. “So, instead of consumers paying the shortfall immediately and within five years, the fund helps power consumers not to pay immediately and to pay for 10 years”, he said.
“For the Discos, the fund helps them to get immediate money to settle their debts and repay for 10 years as they collect tariff from consumers. So, this fund is a relief. It is a like a debt-buy-back such that the CBN takes the debt but does not discount it” he added.
Source: The Punch