Following the decision by the Central bank of Nigeria (CBN) that all revenues should be ringed-fenced by banks, six electricity distribution companies (DisCos) have filed for force majeure over the decision. This is according to TheCable an online media outfit.
According to Thecable report, the firms that declared force majeure are Benin DisCo, Port Harcourt DisCo, Kaduna DisCo, Kano DisCo, Enugu and Ibadan DisCos.
In the monitored report, The DisCos were said to be unhappy with the decision and have written to the Bureau of Public Enterprises (BPE) that the agreements under which they bought majority stakes in the entities have been broken.
By declaring a dispute, the DisCos may return their stakes to the government and in return, demand a refund of their payments when they took over 60 percent shares in the 2013 privatization exercise.
In order to instill payment discipline in the Discos, the federal government Last month, through the CBN asked banks to take over the responsibility of collecting electricity bills from the DisCos, saying that would improve payment discipline in the industry.
Unfortunately, Most of the DisCos are indebted to the banks with their loans classified as nonperforming
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Over the years, The DisCos have been defaulting in paying the remittance threshold to the Nigeria Bulk Electricity Trading (NBET) for the invoice of energy received.
In May, The DisCos has approached a court to stop the federal government from conducting a forensic audit of their operations.
According to TheCable, the recent approval for increase in tariff was to reduce government financial intervention in the sector.
The federal government has provided over a trillion-naira facility for the payment assurance guarantee to resolve liquidity problems in the sector
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