Business

Expired licence: Panic over recovery of CBN’s N88.680bn loan to DISCOs

Published

1 year ago

November 23, 2023

Expired licence: Panic over recovery of CBN’s N88.680bn loan to DISCOs

Members of the House of Representatives on Thursday were shocked over the repayment of the N88.680 billion loan granted by Central Bank of Nigeria (CBN) to Electricity Distribution Companies (DISCOs) whose operating licences expired in October, 2023.

According to the agreement signed with the apex bank and PMO, the DISCOs are to repay the loan within 120 months.

The revelation came at the resumed investigative hearing held at the instance of the House Committee on Public Accounts, chaired by Hon. Bamidele Salam (PDP-Osun) who frowned at the poor performance of the contractors who accessed the fund.

According to the document presented by the Committee, from the total of N86.680 billion loan released by Central Bank of Nigeria (CBN), Abuja Electricity Distribution Company got N7.530 billion, Benin Electricity Distribution Company got N13.293 billion, Eko Electricity Distribution Company got N12.912 billion, Enugu Electricity Distribution Company got N6.427 billion, Ikeja Electricity Distribution Company got N10.456 billion, Jos Electricity Distribution Company got N6.146 billion, Kaduna Electricity Distribution Company got N13.670 billion, Kano Electricity Distribution Company got N7.854 billion while Port Harcourt Electricity Distribution Company got N8.364 billion, respectively.

The lawmakers who spoke during the briefing however expressed concern that the DISCOs who have not been able to access the facility have started repayment of the interests on the loan.

According to the DISCOs Representatives, most of the xontractors engaged have not been able to access the facility approved by the apex bank for the execution of various power projects under their purview

Going by the report from CBN delegation who appeared during the investigative hearing, as at August 2023, out of 50 Contractors, 30 percent has so far been able to complete the process to access the fund.

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Trouble started when Hon. Salam inquired whether the operating licenses of the DISCOs will expire in 2028.

In his response, Managing Director/CEO of Jos Electricity Distribution Company, Engineer Abdul Bello Mohammed, who confirmed to the lawmakers that the operating licences of all the DISCOs expired last month, however noted that two years were declared as non-performing years.

He said: “The EPS 2005 provided for a tenure of 10 years licence for the Distribution Companies. But however, there’s also a provision for renewal of this licence for another 10 years and then extension by five years.”

When asked when the first 10 years elapsed, Engineer Mohammed said: “It should be in October this year.”

Piqued by his response, Hon. Salam inquired further saying: “the first 10 years elapsed in October this year and we are in November already?

In his response, Engineer Mohammed said: “yes, by implication. Going by the provisions of the Act. But there are two years that were declared non-performing years and I think they’ll be added.”

Yet unsatisfied with his explanation, Hon. Salam asked whether the licence will extend to 2025 and automatic, he said: “it has to be applied for. The Act clearly provides that the DISCOs should write.

“The Act is very clear about it, it says that the DISCOs will apply for the renewal of this licence and then the Commission (NERC) can also extend it.”

But when asked again whether the DISCOs have applied for the renewal, Engineer Mohammed said: “it (existing licence) has not expired yet because of the two years non-performing…”

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In another breath, he said: “it is the Commission that will actually clarify that.”

In his remarks, Hon. Salam said: “Why I asked that question was, you have a bill of 120 months loan repayment bill and I’m afraid that if the licence expires and there’s no renewal, where do we get our money back?”

While lamenting that some of the DISCOs are not stable financially, Hon. Salam frowned at the inability of the DISCOs to access the intervention fund worked out for them through the apex bank to boost their capacity.

While responding to hullabaloo over the involvement of the DISCOs repayment, he said: “We were made to sign contract awards as DISCOs and the PMO also issued the final contract award.

“The projects are meant to confront the problems of the DISCOs. We agreed with TCN that this money will be channeled through the distribution companies with the purpose of addressing these bottlenecks. And that is the structure that has been put in place through the PMO and everybody is involved.”

However at another breath, Engineer Mohammed argued that: “the payments are not DISCOs projects, they are specifically TCN projects but DISCOs are used through all the lending structures to shoulder that responsibility.”

After the heated session, the Committee resolved to summon all the stakeholders involved in the transactions including, CBN, Nigerian Electricity Regulatory Commission (NERC), Deposit Money Banks, DISCOs, Transmission Company of Nigeria (TCN), Contractors, among others.

While ruling, Hon. Salam adjourned the investigative hearing to 13th December, 2023

Expired licence: Panic over recovery of CBN’s N88.680bn loan to DISCOs

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Lagos Rail Mass Transit part of FG free train ride – NRC

Published

22 hours ago

December 21, 2024

Trends Admin

Lagos Rail Mass Transit part of FG free train ride – NRC

The Nigerian Railway Corporation (NRC) has disclosed that the Lagos Rail Mass Transit (LRMT) trains are included in the Federal Government’s free train ride initiative for the Christmas and New Year celebrations.

The LRMT, which currently includes the Phase 1 Blue Line Rail and the Phase 1 of the Red Line Rail, operates under the Lagos Metropolitan Area Transport Authority (LAMATA).

This announcement was made by Ben Iloanusi, the Acting Managing Director of the NRC, during an interview on NTA News TV on Friday, following the launch of the initiative earlier that day.

While Iloanusi stated that Phase 1 of both the Blue Line and Red Line Rail projects are part of the program, LAMATA has yet to confirm this inclusion.

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Iloanusi outlined the other routes benefiting from the scheme, which include the Lagos-Ibadan Train Service, Kaduna-Abuja Train Service, Warri-Itakpe Train Service, Port Harcourt-Aba Train Service, and the Bola Ahmed Tinubu Mass Transit in Lagos. Notably, little was previously known about the Bola Ahmed Tinubu Mass Transit service until this disclosure.

“Let me mention the routes where this free train service is happening. We have the Lagos-Ibadan Train Service, we have the Kaduna-Abuja Train Service, we have the Warri-Itakpe Train Service, we have the Lagos Rail Mass Transit trains, we have the Port Harcourt-Aba Train Service, and we have what we call the Bola Ahmed Tinubu Mass Transit, which is also in Lagos,” he stated.

Iloanusi provided operational updates, stating that passengers nationwide can access free tickets online or, for those unable to do so, at train stations where they will be profiled and validated.

He noted that passengers using NRC-managed services (excluding the Lagos Rail Mass Transit) should reserve tickets via the official website, www.nrc.gov.ng, with a valid ID required. He also advised travelers to plan, arrive on time, and bring valid identification.

Lagos Rail Mass Transit part of FG free train ride – NRC

Business

NNPC denies claim of Port Harcourt refinery shutdown

Published

23 hours ago

December 21, 2024

Trends Admin

Port Harcourt refinery

NNPC denies claim of Port Harcourt refinery shutdown

The Nigerian National Petroleum Company Limited (NNPCL) has denied claims in media reports that the newly refurbished Port Harcourt refinery has shut down.

The national oil company denied the claim in a press release issued by its Chief Corporate Communications Officer, Olufemi Soneye, on Saturday.

Soneye said the claim was false and urged Nigerians to disregard it. He stressed that the Port-Harcourt Refinery is fully operational.

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The statement read, “The attention of the Nigerian National Petroleum Company Limited (NNPC Ltd.) has been drawn to reports in a section of the media alleging that the Old Port Harcourt Refinery which was re-streamed two months ago has been shut down.

“We wish to clarify that such reports are totally false as the refinery is fully operational as verified a few days ago by former Group Managing Directors of NNPC.”

He noted that preparation for the day’s loading operation is currently ongoing, and added that claims of the shutdown are “figments of the imagination of those who want to create artificial scarcity and rip-off Nigerians.”

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Business

CBN permits BDCs to buy up to $25,000 FX weekly from NFEM

Published

2 days ago

December 20, 2024

Trends Admin

CBN Governor, Olayemi Cardoso

CBN permits BDCs to buy up to $25,000 FX weekly from NFEM

The Central Bank of Nigeria (CBN) has granted Bureau de Change (BDC) operators temporary permission to purchase up to $25,000 weekly in foreign exchange (FX) from the Nigerian Foreign Exchange Market (NFEM).

This move, detailed in a circular dated December 19, 2024, is designed to meet seasonal retail demand for FX during the holiday period.

The circular was signed by T.G. Allu, on behalf of the Acting Director of the Trade and Exchange Department.

The arrangement will be in effect from December 19, 2024, to January 30, 2025.

Under the directive, BDCs may purchase FX from a single Authorized Dealer of their choice, provided they fully fund their accounts before accessing the market.

Transactions to occur at the prevailing NFEM rate

The transactions will occur at the prevailing NFEM rate, and BDCs are required to adhere to a maximum 1% spread when pricing FX for retail end-users.

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All transactions conducted under this scheme must be reported to the CBN’s Trade and Exchange Department.

The circular read in part:

“In order to meet expected seasonal demand for foreign exchange, the CBN is allowing a temporary access for all existing BDCs to the NFEM for the purchase of FX from Authorised Dealers, subject to a weekly cap of USD 25,000.00 (Twenty-five thousand dollars only).

This window will be open between December 19, 2024 to January 30, 2025.

“BDC operators can purchase FX under this arrangement from only one Authorized Dealer of their choice and will be required to fully fund their account before accessing the market at the prevailing NFEM rate. All transactions with BDCs should be reported to the Trade and Exchange department, and a maximum spread of 1% is allowed on the pricing offered by BDCs to retail end-users.”

The CBN assured the general public that PTA (Personal Travel Allowance) and BTA (Business Travel Allowance) remain available through banks for legitimate travel and business needs.”

These transactions are to be conducted at “market-determined exchange rates” within the NFEM framework.

This initiative reflects the CBN’s strategy to stabilize the FX market and manage seasonal surges in demand.