NERC Ruling Leads To Energy Re-Evaluation In Nigeria

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Two Federal High Courts sitting in Abuja have granted separate injunctions at the instance of eight electricity distribution companies, restraining the Nigerian Electricity Regulatory Commission (NERC) from implementing its directive for the Central Bank of Nigeria (CBN) to escrow the accounts of the distribution companies, who cannot meet their monthly payment obligations to the Nigeria Bulk Electricity Trading Plc (NBET)..
NERC and other connected persons were also restrained from compelling the distribution companies from entering into Promissory Note arrangements with NBET, as well as from calling on the Letters of Credit (LC) placed by the Discos with NBET through certain commercial banks, pending the hearing and determination of the Motion on Notice.
The distribution companies have alleged that despite the cash flow problems they faced as a result of NERC’s bad management of the power sector, the regulatory agency had vide a directive from the apex bank to escrow the accounts of Discos who cannot meet their monthly payment obligations under the vesting contracts and who are yet to place their LC with NBET in accordance with the escrow directive.
Source:Energy Mix Report
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