Regina Otokpa ABUJA 
Energy experts have said there have been a level of revenue transparency and payment discipline since the 11 electricity distribution companies (DisCos) had their accounts escrowed by the Central Bank of Nigeria (CBN).
In a bid to recover its fund from the debt laden sector so it does not fritter away or be used by the DisCos to finance their respective investments, CBN locked the bank accounts of all DisCos, only allowing inflow of cash without withdrawal.
Commending the initiative, experts in the sector have said that the move by the apex bank is a move in the right direction, claiming that it saved the sector from collapse, given the statistics from the National Bureau of Statistics (NBS) showing that the non-performing loans in the power sector stood at N33.22 billion at the end of 2020, out of N1.23 trillion NPLs recorded by banks.
According to them, the development may have halted misappropriation of fund by the utility companies, introduced transparency, increase revenue, enable government to recover monies loaned to the companies while reducing the financial burden in the sector.
With an unpaid debt of N819.97 billion to commercial banks, repayment of loans was the first priority, followed by 100 per cent payment of market operators’ invoices and the invoices from the Nigerian Bulk Electricity Trading Company before others, once the accounts were escrowed.
According to the Special Assistant to the President on Infrastructure, Ahmed Zakari, the development led to increase in the sector’s revenue by over 100 per cent, even as industry statistics showed that electricity market revenue grew by 10.55 per cent to N272.47 billion between the months of July and December 2020 as a result of restrictions on the bank accounts of DisCos.
Zakari added that it aided the liquidity flows to enable operations of the generation companies and Transmission Company of Nigeria (TCN).
A former Managing Director of NBET, Rumundaka Wonodi, who stressed that it had become critical to ensure DisCos perform their operations, noted that the account escrowing ensured transparency in the sector saying, “so far it had helped in increasing revenue in the sector. So many people have accused the DisCos or poor remittances, the initiative will make everything open. But it needs to be widened.”
The Market Operator of TCN, Edward Eje, said the escrowing of Disco’s monthly revenue collection helped in beefing up revenue accountability.
He said: “By CBN escrow intervention, therefore, it will be difficult for any DisCos to misappropriate their monthly revenue collection, as the CBN’s Special Purpose Vehicles (SPVs), Meristem monitors all the DisCos commercial banks through which every DisCos revenue is remitted. This intervention has actually brought about a level of payment disciplinein the market.”
Eje advised that CBN intervention could be complemented with the market operator’s instruments, which include an updated bank guarantee with the MO and MeriInter stem and timely updating of the MO of the DisCos’ performance.
However, the National President, Electricity Consumers Association, Mr. Chijoke James, urged the apex bank to ensure investment on distribution infrastructure and meters for consumers are given special attention insisting that while keeping the financial status of the sector healthy was important, improving quality of service to consumers was more critical.
“We want to see all consumers provided with electricity meters and an end to estimated billing system in Nigeria. We cannot continue to allow the distribution companies shortage consumers by issuing them bills for electricity they did not consume. We find this unacceptable and will continue to advocate against such unjust practice by the DisCos,” he said.
On his part, a former Chairman of NERC, Sam Amadi, raised concerns that the gains in the revenue may remain elusive if it doesn’t translate to improved operations of the DisCos, saying: “I don’t think it has significantly improved power supply to homes and businesses.
“The CBN intervention is a special funding to deal with liquidity crisis and legacy debt in the sector. It was supposed to be repaid but through a convenient process that will not adversely affect DisCos’ investment plans. The gains are twofold: whether CBN is getting repayment as and when due. I think through the escrow CBN can guarantee itself repayment.”