CBN to sanction DMBs over breach of NEMSF guidelines

The Central Bank of Nigeria, CBN, has approved a sanctions Grid for Deposit Money Banks, DMBs, willing to participat in the Nigeria Electricity Market Stabilization Fund, CBNNEMSF.

According to the apex bank in a circular to all DMBs, and signed by Director, Financial Policy and Regulation Department, Kevin Amugo, the approval was to ensure compliance by DMBs to the conditions of the facility.

“In furtherance of our circular referenced FPR/DIR/GEN/CIR/01/004, dated March 4, 2015, forwarding the terms terms and conditions for participating deposit money banks in the implementation of the CBN-NEMSF.

“A copy of the sanctions Grid is attached herewith and may also be accessed from
the CBN website”, the bank stated.

It advised all participating DMBs to seek further clarification from the Director, Development Finance Department of the bank..

It would be recalled that the apex bank, as part of government’s efforts to address the worsening power situation in the country, had on May 20 this year disbursed a total of N55,456,161,481 from the NEMSF to electricity companies.

Of the amount, the distribution companies got N8,670,234,863.76; the generating
companies received N35,834,536,939; while gas suppliers got N10,491,710,788.66.

All the service providers in the power value chain were given a total of N459,678,889.55.

The latest disbursement was the fourth tranche from the N213 billion stabilisation
fund launched by the apex bank as part of its development finance interventions in
the economy.

Speaking during the signing of the agreement for the disbursement of the fund and presentation of cheques to the power sector entities in Lagos, Governor of the bank, Mr. Godwin Emefiele, said the fourth batch disbursement was significant in the bank’s efforts to achieve a contract based electricity market.

According to him, this will activate Power Purchase Agreements (PPA) by the Nigerian Bulk Electricity Traders (NBET) and signal activation of industry contracts for power generation.