The House Public Accounts Committee received a petition on the lack of judicious use of the funds provided to the DISCOs by the CBN for power projects .
The House of Representatives Public Accounts Committee (PAC) has summoned the Central Bank of Nigeria (CBN) and 11 Electricity Distribution Companies (DISCOs) over $321 million and N18.2 billion in loans for the accelerated transmission distribution interface, lines, and substation projects.
They are expected to appear before the Committee next week Wednesday to give a detailed explanation of the utilisation of the aforementioned funds.
Chairman of the PAC, Rep. Bamidele Salam (PDP, Osun) issued the summons when the Managing Director of the Transmission Company of Nigeria (TCN), Engr Sule Abdulaziz, appeared before the Committee on Thursday.
He noted that a petition was received on the lack of judicious use of the funds, which were paid to the DISCOs by the CBN at the prompting of the TCN.
Abdulaziz informed the Committee that the funds were paid directly to the DISCOs by the CBN to embark on the various power projects, adding that the repayment of the loans was from the revenue of the TCN.
However, the explanation by the TCN did not sit well with members of the Committee, who took turns to express concern over the repayment arrangement.
The chairman demanded that TCN provide details of the disbursement of the loans, the procurement process, how many DISCOs were involved, the stage of the projects, and the structure of the repayment of the loans to the beneficiaries of the loan.
Salam said, “Sometime in 2021, the then President Muhammadu Buhari granted that certain funds be made available for enhancing the capacity of our transmission and distribution lines to be able to have a more robust power sector intervention and these funds were made available for certain projects to the distribution companies.
“It is the concern of the petitioner that the fund has not been judiciously used and that the project ought to have been delivered by now, upon which we caused a letter to be written to the Transmission Company of Nigeria, which also sent in a response stating the status report of the project as well as the procedure for the implementation of that loan disbursement and execution of the project by the distribution companies.
“Our concern is to ensure that all our institutions work well in accordance with the law and global best practices and to ensure money is judiciously utilized.”
Further, the TCN boss explained that there was a gap in the electricity sector as the distribution companies were complaining that the TCN was not giving them supply.
He said, “It was observed that TCN does not have that amount to do those projects, so the Federal Government involved the CBN to finance the projects. NERC (National Electricity Regulatory Commission) being the regulator, now is the one leading the exercise. TCN is just a beneficiary of the project. It is signed by the DISCOs. In TCN there is a Project Monitoring Office that was set up to do this procurement.”
Also speaking, the TCN Market Operator, Engr Edmond Eje, explained that NERC oversaw engagement between TCN and 11 DISCOs to align on a list of critical interface projects that would significantly increase TCN’s capacity to unlock DISCOs energy demand in critical load centres.
He said “A total of 125 projects were identified and agreed upon in the tripartite engagement. The Commission approved the project list of 125 projects as well as the securing of financing from the CBN for the same project to the tune of about N122.3 billion in loan.
“The TCN and the 11 distribution companies set up a multi-stakeholder project management office that is responsible for undertaking the procurement and eventual monitoring and evaluation of the project to implement the DISCO intervention.
“DISCOS are the beneficiaries and took it on behalf of TCN to execute projects. At the end of the day, it was scheduled that from TCN’s revenue, these loans would be amortized from source.
“In order words, every month, each of this money sent to the contractors would be amortized through our revenue. “