CBN Directs Banks To Lead Electricity Market Collection

The Central Bank of Nigeria has directed Deposit Money Banks in the country to lead electricity market collection.

The apex bank said that collections and remittances of the DisCos to both Nigerian Bulk Electricity Trading, Transmission Company of Nigeria would be done by DMBs.

The banks are also responsible in providing guarantees to DisCos.

Nigeria’s apex bank announced the development in a circular addressed to banks, which was dated August, 21, seen by THE WHISTLER.

CBN noted that the move was in line with a directive of the Power Sector Coordination Working Group to improve payment discipline in the Nigerian Electricity Supply Industry.

It said the directive will boost the overall quality of electricity generation, transmission and distribution across the country.

CBN said, “Banks providing Bank Guarantees to Nigeria Bulk Electricity Trading Plc and the Transmission Company of Nigeria on behalf of DisCos, would take full responsibility for the collections of the concerned DisCos, and the remittances of the DisCos to both NBET and TCN.

“For the avoidance of doubt, no DMB is permitted to open or continue to maintain a collection account for a DisCo without the express no-objection of the DMB that guaranteed its exposure to NBET or TCN.”

CBN said payment or settlement of all NESI related goods or services will be made through the Nigerian Banking System.

The circular added, “Consequently, all collections for the payments of NESI regulated goods and services provided by a DisCo shall be paid into a designated account such that collections arising from services rendered by the DisCo shall be paid into an account in the sole name of the DisCo.

It added, “Collections arising from services rendered by a third party/parties on behalf of the DisCo shall be paid into an account in the joint name of the DisCo and the third- party vendor(s).”

According to the apex bank, energy and non-energy collections of DisCos both cash or cashless will only be performed by banks.

The CBN said no entity has the right to collect revenues for DisCos except it is authorized by a DMB in line with the relevant CBN Guidelines for Agent Banking and Agent Banking relationships.

The circular said further that DMBs will be permitted to authorize its Agents to collect energy and non- energy payments on its behalf for any DisCo.

The Central Bank in the circular said banks would also be held liable for the action or inactions of their agents.

CBN added, “Any DMB found to be maintaining any account(s) for any entity collecting payments on behalf of any DisCo without appropriate authorization shall have regulatory sanctions imposed on it.

“DMBs are to work with relevant stakeholders to ensure that all electricity customer payment channels/endpoints must identify electricity market payments in such a way as to provide the identification of these payments and information relating to: DisCo, the DisCo Account Information such as Account ID, Customer ID, Meter ID etc.”

The bank in the circular further explainedthat all DisCo collections both cash and cashless will be regarded as an energy collection except identified otherwise.