CBN accuses MAPs and Discos of embezzling funds intended for counting Nigerians
The Central Bank of Nigeria (CBN) has moved to freeze 157 accounts of companies that are Meter Asset Providers (MAP) for allegedly embezzling funds intended for the purchase of prepaid meters.
The apex bank, in a complaint filed in the Federal High Court in Lokoja, Kogi State, on July 20, asked commercial banks to restrict the account of 10 companies that received intervention funds in the electricity sector under the National Mass Metering Program (NMMP) for 180 days. pending the outcome of his investigation.
The story was first reported by TheCable.
What is NMMP?
The National Mass Metering Program (NMNP) is an initiative of the Nigerian Electricity Regulatory Commission in conjunction with the Presidential Power Task Force.
- The initiative which was launched in August 2020, was created to enable the CBN to finance the acquisition of meters on behalf of DisCos by paying directly to MAPs.
- The NMMP is geared towards mass metering of Nigerians by providing loan facilities to Electricity Distribution Companies (DisCos) to purchase meters for its customers; and Local Meter Manufacturers, for the manufacture and assembly of meters.
List of companies concerned
According to TheCable, companies listed by the CBN as being involved in the hijacking include Mojec Meter Asset Management Company Limited, Integrated Power Nigeria Limited, Holley Metering Limited, Protogy Global Services Limited and Turbo Energy Limited.
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Others are G Unit Engineering Limited, Koby Global Engineering Services Limited, FLT Energy Systems Limited, Smart Meters Asset Provider Company Limited and Cresthill Engineering Limited.
What the CBN says
The CBN in the suit said, “The Central Bank of Nigeria has investigated the activities of twelve (12) including the Respondents, Providers of Meter Assets (MAPs) alleged to have misappropriated Central Bank of Nigeria Power Sector Response Funds under the National Mass Counting Program (NMMP).
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- “The review sought to determine the flow of funds made available to MAPs, covering the period from January 1, 2020 to March 15, 2022. The preliminary review found that the defendants misappropriated a substantial portion of the funds for other uses through related entities and individuals/companies related to the Electricity Distribution Companies (DisCos) and the now defunct Power Holding Company of Nigeria (PHCN).
- “The embezzlement of electricity sector intervention funds under the National Mass Metering Program (NMMP) provided by the claimant’s banks has further caused serious instability in the electricity sector and supported the regime. billing felt that the federal government is desperately trying to make something of the past.
- “The diversion of said funds through the bank accounts of the defendants has continuously undermined the applicant’s banking intervention system to support various sectors of the Nigerian economy.
- “The misappropriation of the said funds and the continued instability in the power sector are likely to cause significant economic and financial losses to investors, as well as to the entire systems and the Nigerian economy in general, if they are not reduced.
According to NERC, he created the initiative in response to President Buhari’s order that Nigerians must be measured. “The president has ordered that there be a nationwide mass metering program in an effort by the federal government to put an end to estimated and arbitrary electricity billing.
The Central Bank then released its funding framework for the NMMP in October 2020.
Central Bank investment in the electricity sector
The Central Bank of Nigeria is heavily invested in the power sector through its intervention support programs. According to the bank, it has disbursed over N254.4 billion through its Nigeria Electricity Market Stabilization Facility-Phase 2 (NEMSF-2).
- During the last meeting of the Central Bank’s Monetary Policy Committee, Governor Godwin Emefiele disclosed that he had shelled out around N47.8 billion for around 865,956 meters across the country.
- “To improve electricity supply to reduce the overall cost of generation in the real sector, the Bank has also intervened in the electricity sector to facilitate the deployment of enabling infrastructure. In summary, the sum of N2.53 billion has been disbursed to Distribution Companies (DisCos) for their Operational Expenditure (OpEx) and Capital Expenditure (CapEx), under the Market Stabilization Facility. Electricity of Nigeria – Phase 2 (NEMSF-2). Cumulative disbursement under NEMSF-2 currently stands at N254.46 billion.
- “Under the National Mass Metering Program (NMMP), the Bank disbursed N47.82 billion for the purchase and installation of 865,956 meters across the country.”
Has another initiative gone wrong?
The decision to freeze the accounts of some of the MAPs therefore comes as a surprise given that NERC only recently touted the success of Phase 0 of the initiative and revealed that it had shortlisted 45 companies for the next phase.
NERC in August
“Our goal is to install four million meters for our customers. From our experience in phase zero, we want to make sure manufacturers can deliver before the allocation is made.
“I’m sure we can complete the assessment by the end of this month and it will be finalized by the Procurement Implementation Unit.
“We hope that before the end of August we will start to see meters from our local manufacturers go to electricity distribution companies and then to end-user customers.”
The Central Bank’s request to freeze the accounts of some of the MAPs suggests that the initiative may have been mishandled, calling into question the need for the government to continue financing the sector.