TAYO ELEGBEDE
The Central Bank of Nigeria (CBN) has rolled out new policy measures to curtail exposures of electricity distribution companies (DisCos) to banks, Nigeria Bulk Electricity Trading (NBET) and Transmission Company of Nigeria (TCN).
The new measures are contained in a circular issued by the Director of Banking Supervision Department of the CBN, Bello Hassan.
The apex bank directed banks providing guarantees to NBET and TCN, on behalf of DisCos, to take full responsibility for the collections of the concerned DisCos, and the remittances of the DisCos to both NBET and TCN.
It barred banks from opening or maintaining collection accounts for DisCos with the permission of their bank guarantors.
The circular says, “For the avoidance of doubt, no DMB is permitted to open or continue to maintain a collection account for a DisCo without the express no-objection of the DMB that guaranteed its exposure to NBET or TCN.”
Funding and huge debt have been dominant problems of the Nigerian power sector which have limited its growth.
The new measures by the CBN are aimed at improving payment discipline in the Nigerian Electricity Supply Industry (NESI), and boosting the overall quality of electricity generation, transmission and distribution.
On the issue of payment or settlement of NESI related goods or services, the CBN directed that such payment or settlement be made through the Nigerian banking system.
It accordingly directed that a designated account be created for the payment of NESI regulated goods and services provided by a DisCo.
The circular reads in part, “Consequently, all collections for the payments of NESI regulated goods and services provided by a DisCo shall be paid into a designated account such that:
“A. Collections arising from services rendered by the DisCo shall be paid into an account in the sole name of the DisCo;
“B. Collections arising from services rendered by a third party/parties on behalf of the DisCo shall be paid into an account in the joint name of the DisCo and the third party vendor(s).
“All energy and non-energy collections of DisCos, whether cash or cashless, shall only be performed by Deposit Money Banks (DMBs).
“No entity shall be permitted to collect revenues for DisCos except if that entity is so authorized by a DMB in line with the relevant CBN Guidelines for Agent Banking and Agent Banking Relationships, therefore:
a. The DMB shall be permitted to authorize its agents to collect energy and nonenergy payments on its behalf for any DisCo,
b. The actions or inactions of the agent shall be the responsibility of the authorizing
DMB.”
The CBN warned that regulatory sanctions will be imposed on any bank found to maintain any account(s) for any entity collecting payments on behalf of any DisCo without appropriate authorization.
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