Circular to all Deposit Money Banks: Terms and Conditions for Participation by Deposit Money Banks (DMBs) in the Implementation and Execution of Nigeria Electricity Market Stabilization Facility ("CBN-NEMSF")

09-46237404 Tel .........

E-mail: fprd@cbn.gov.ng March 4, 2015 FPR/DIR/GEN/CIR/01/004 CIRCULAR TO ALL DEPOSIT MONEY BANKS terms and conditions for participation by deposit money banks (dmbs) IN THE IMPLEMENTATION AND EXECUTION OF NIGERIA ELECTRICITY MARKET STABILIZATION FACILITY ("CBN-NEMSF") Following the Central Bank of Nigeria (CBN) approval of the terms and conditions for the participation of Deposit Money Banks (DMBs) in the implementation and execution of the Nigeria Electricity Market Stabilization Facility ("CBN-NEMSF"), the terms and conditions and the participation agreement are available at www.cbn.gov.ng for the compliance of all participating DMBs.

For further information, kindly contact Director, Development Finance Department, Central Bank of Nigeria, Abuja.

KEVIN N. AMUGO
DIRECTOR, FINANCIAL POLICY & REGULATION DEPARTMENT Terms and Conditions for Participation by Deposit Money Banks in the Implementation and Execution of Nigerian Electricity Market Stabilization Facility ("CBN-NEMSF")

February 2015

1. Introduction

(A)
Following the handover of the Power Holding Company of Nigeria ("PHCN") successor companies to private participants on November 1, 2013, the Nigerian Electricity Supply Industry ("NESI") has been fraught with liquidity challenges arising from several factors including insufficient gas supply and higher baseline Aggregate Technical Commercial & Collection Losses ("ATC&C") than what had been assumed under the current MYTO 2.

(B)
The Central Bank of Nigeria ("CBN") has, pursuant to Section 31 of the Central Bank of Nigeria Act, 2007 ("the CBN Act") indicated its desire to invest in the Refinancer to be set up to provide a facility- (the CBN-Nigerian Electricity Market Stabilization Facility "CBN-NEMSF"), aimed at settling outstanding payment obligations due to Market Participants, Service Providers and gas suppliers that accrued during the Interim Rules Period (IRP Debts) as well as the Legacy Gas Debts of the PHCN generation companies owed to gas suppliers and the Nigeria Gas Company Limited ("NGC")which have been transferred to the Nigeria Electricity Liability Management Company Limited/Gte ("NELMCO") ("the Legacy Gas Debt"). The objective is to put the NESI on a route to economic viability and sustainability.

(C)
The Refinancer will be set up by CBN and will amongst other functions refinance the Facility by repaying the Lenders for payments made to Market Participants, Service Providers, NGC and gas suppliers for the settlement of the IRP Debts and the Legacy Gas Debts. The funds to be utilized by the Refinancer for this purpose will be raised by the issuance of debenture notes by the Refinancer to be fully subscribed by CBN in accordance with the powers granted to the CBN pursuant to section 31 of the CBN Act. The Refinancer will be managed by an Administrator appointed by CBN.

(D)
In order to secure the repayment of the Facility, NERC has committed to reset the Multi Year Tariff Order 2 (MYTO 2) by issuing the MYTO 2.1.

(E)
These Terms and Conditions are stipulated by the CBN for the participation of Banks as Mandate Banks, Collection Banks and Principal Collection Banks in the CBN-NEMSF.

2. Definition Of Terms

" Accounts	means the agreement between the Refinancer, each
Administration	DISCO, TCN, Mandate Banks,	Collections Bank and
Agreement"	Principal Collection Bank governing the management of
	the Transaction Accounts and flow of funds between the
	Transaction Accounts.
"Administration	means the agreement between the Refinancer and the
Agreement"	Administrator setting out the terms of the Administrator's
	appointment.

"Administrator"	means Meristem Wealth Management Limited or any other
	person appointed by CBN to administer and manage the
	CBN-NEMSF for and on behalf of the Refinancer;
"ATC & C"	means Aggregate Technical Commercial and Collection
	losses;
"Banks"	means collectively, the Mandate Banks, Collection Banks,
	and Principal Collection Banks ; and individually, the
	"Bank";
"Beneficiaries"	means collectively, Market Participants, Service Providers,
	NGC and gas suppliers owed the IRP Debts and Legacy
	Gas Debts and each "Beneficiary";
"BOFIA"	means the Banks and other Financial Institutions Act, Cap
	B3, Laws of the Federation of Nigeria 2004 and any
	amendment or re-enactment thereof;
"Business Day"	means a day (other than a Saturday or Sunday or a public
	holiday and any other day on which banks located in
	Nigeria are authorized by law or other governmental action
	to close) on which banks in Nigeria are open for general
	business;
"CBN Consent Letter"	means a letter from CBN acknowledging and approving
	the transfer of funds to the Refinancer in accordance with
	the Deed of Debenture;
"CBN	Debt	Service	means an account so designated and maintained with CBN
Account"	into which repayments of the CBN-NEMSF are transferred
	from the SPV Repayment Account;
"Collection Banks"	means the Banks with which DISCOs open and maintain
	the DISCO Feeder Collection Accounts;
"Commitment"	means the amount approved by CBN for each Lender to
	disburse to the to the SPV Disbursement Escrow Account;
"Conditions Precedent to	means such conditions precedent which are to	be
Disbursement"	undertaken by the Market Participants, NERC and CBN
	prior to the disbursement of the Facility as specified in the
	Disbursement Agreements and the Liability Transfer and
	Debt Settlement Agreement;
"Conditions	Subsequent	means such conditions	subsequent specified in the

to Disbursement"	Disbursement Agreements and the Amended and Restated
	DISCO Disbursement Agreements;
"Debenture Deed"	means the agreement to be entered into between the
	Refinancer and CBN pursuant to which CBN shall
	subscribe fully to debenture notes to be issued by the
	Refinancer for the purpose of providing the CBN-
	NEMSF:
"Disbursement"	means disbursement of the Facility to the Beneficiaries by
	in accordance with the Disbursement Agreements and the
	Liability Transfer and Debt Settlement Agreement;
"Disbursement	includes the following agreements entered into by CBN,
Agreements"	NERC, Market Participant, the Lenders, and the
	Refinancer for the purpose of disbursing the portion of the
	CBN-NEMSF due to each Market Participant.
	i.	The GENCO Disbursement Agreement.
	ii.	The TCN Disbursement Agreement.
	iii.	The	Amended and	Restated	DISCO
	Disbursement Agreement.
	iv.	The GENCO Novation Deed
"Disbursement Date"	Shall have the meaning given to it in the Transaction
	Documents;
"DISCO	Feeder	means those accounts to be newly opened or already
Collection Accounts"	maintained by each DISCO with the Collection Banks into
	which all payments for electricity consumed by consumers
	are paid or will be paid;
"Disbursement	Escrow	means an account managed by the Refinancer for
Account"	aggregating the Commitments and undertaking	the
	Disbursement in accordance with the terms of the
	Amended and Restated DISCO Disbursement Agreement
	and the Account Administration Agreement;
"Disbursement Refinance	means the agreement between the Refinancer, Lenders, the
Agreement"	DISCOs and the Administrator for the repayment of the
	Facility to the Lenders by the Refinancer;
"DISCOs"	means the licensed electricity distribution companies and
	the singular term "DISCO" shall be construed accordingly.
"Facility"	means the aggregate sum of N213, 417, 694, 034 .34
	Billion Naira to be disbursed to the Beneficiaries in

	accordance with the terms of each Disbursement
	Agreement and the Liability Transfer and Debt Settlement
	Agreement;
"Final Maturity Date"	means the date for full and final repayment of the Facility
	as stated in each DISCO Disbursement Agreement;
"GENCOs"	means the licensed generation companies who are Market
	Participants, are connected to the national grid and are
	owed IRP Debts;
"GENCO Disbursement	means the agreement which sets out the terms for
Agreement"	disbursement of the CBN-NEMSF to GENCOs and
	executed between each GENCO, CBN and NERC and to
	be novated to the Refinancer. The plural term "GENCO
	Disbursement Agreements" shall be construed accordingly;
"Interim Rules Period or	means the period under which Market Participants operate
IRP"	under the Interim Rules.
"Interim Rules"	means the rules for the period between completion of the
	privatization by handover of the PHCN successor
	companies to core investors and the start of the
	Transitional Electricity Market (TEM);
"IRP Debts"	means debts incurred by Market Participants during the
	Interim Rules Period;
"Legacy Gas Debts"	means the gas debts of the PHCN generation companies
	owed to NGC and gas suppliers prior to 1st November 2013
	which have been transferred to NELMCO by virtue of the
	Pre-Completion Liabilities Transfer Agreement between
	NELMCO and the GENCOs;
"Lenders"	means the deposit money banks that will transfer the
	Commitment amounts to the to the Refinancer for the
	purpose of the Disbursement and the singular term
	"Lender" shall be construed accordingly;
	means the agreement transferring the liability and
"Liability Transfer and
Debt	Settlement	obligation comprised in the Legacy Gas Debts from
Agreement"	NELMCO to the Refinancer;
"Mandate Banks"	means the deposit money banks approved by CBN to act as
	Lenders;

5

"Market Operator"	means an entity including its successors and assigns
	licensed to carry out market operations under the Electric
	Power Sector Reform Act 2005 and the Market Rules and
	engaged in the administration of the wholesale electricity
	market, including making, publishing, amending,
	administering and or enforcing the Market Rules and
	settlement of payments among Market Participants
	pursuant to its License.
"Market	Participation	means an agreement required under the Market Rules to be
Agreement"	signed by a person who intends to play any role or
	participate in the NESI, to confirm the person's
	participation in and undertaking to abide by the rules and
	regulations of the NESI;
"Market Participants"	means those persons that have executed a Market
	Participation Agreement in accordance with the Market
	Rules and a "Market Participant" shall be construed
	accordingly;
"Market Rules"	means the Market Rules for the Electricity Sector of
	Nigeria 2009;
"MYTO 2"	means the Multi Year Tariff Order created by an order of
	NERC published in June 2012;
"NELMCO"	Nigeria Electricity Liability Management Ltd/Gte;
"NERC"	means Nigerian Electricity Regulatory Commission;
"NESI"	means Nigerian Electricity Supply Industry;
"NGC"	means Nigeria Gas Company;
"NIBOR"	means Nigerian Inter Bank Offered Rate;
"PHCN	Successor	means Privatized Distribution and Generation Companies
Companies"	previously owned by PHCN;
"Person"	includes any individual, firm, company, corporation,
	government, state or agency of a state or any association,
	trust, joint venture, consortium or partnership (whether or
	not having separate legal personality);

"PHCN"	means the Power Holding Company of Nigeria PLC (in
	Liquidation) a company duly incorporated in accordance
	with the Companies and Allied Matters Act, Cap C 20,
	LFN 2004;
"Principal	Collection	means an account so designated held by a DISCO with the
Account"	Principal Collection Bank for the purpose of receiving all
	payments from the Feeder Collections Accounts;
"Principal	Collection	means a Collection Bank designated by a DISCO to hold
Bank"	its Principal Collection Account in accordance with the
	Accounts Administration Agreement;
"Refinancer"	means the special purpose vehicle to be set up by CBN and
	NERC for the purpose of implementing the CBN-NEMSF;
"Repayment Date(s)"	Shall have the meaning specified in the Transaction
	Documents;
"Repayment Schedule"	means the schedule for repayment of the Facility as
	provided under the Disco Disbursement Agreement and the
	Amended and Restated DISCO Disbursement Account;
"Service Providers"	means NERC and TCN as the Market Operator, System
	Operator and or the Transmission Service Provider;
"SPV Repayment	means an account created for the repayment of the Facility
Account"	which shall be held by the Refinancer and domiciled in
	CBN for the purpose of receiving payment from the
	Principal Collection Account;
"TCN"	means Transmission Company of Nigeria its successors
	and assigns;
"TCN Disbursement	means the Agreement which sets out the terms for the
Agreement"	disbursement of the CBN-NEMSF, executed between TCN
	and the Refinancer;
"Transaction Accounts"	means all the accounts opened and maintained under and
	pursuant to the Accounts Administration Agreement;
"Transaction	means the following documents:
Documents"	Deed of Debenture:
	i.
	ii.	Participation Agreement;
	iii.	The Disbursement Agreements;	7

iv.	The Disbursement Refinance Agreement;
v.	Accounts Administration Agreement;
vi.	Liability Transfer and Debt Settlement
	Agreement;
vii.	Administration Agreement
and other document designated as a Transaction
Document by the Refinancer.

3. Terms And Conditions

1.	MODE OF FUNDING	a.	The CBN shall subscribe to debenture notes issued
	by the Refinancer in the total sum of the Facility
	amount.
	b. Each Lender shall make available (for the benefit of
	the Beneficiaries) the amount of its Commitment in
	the Facility to the Refinancer.
2.	REFINANCING	The Refinancer shall refinance the Facility by repaying the
	Lenders in proportion to each Lender's Commitment in
	accordance with the DISCO Disbursement Refinance
	Agreements and the Amended and Restated DISCO
	Disbursement Agreements.
3.	ROLE OF THE	The Administrator shall administer and manage the CBN-
ADMINISTRATOR	NEMSF for and on behalf of the Refinancer.
4.	FACILITY AMOUNT	N213, 417, 694,034.34 Billion - Two Hundred and
	Thirteen Billion Four Hundred and Seventeen Million Six
	Hundred and Ninety Four Thousand and Thirty Four Naira
	Thirty Four Kobo.
5.	CURRENCY	Naira.
6.	TENOR	The Facility shall have a tenor of 10 years.
7.	MORATORIUM	There shall be a moratorium period of 12 months on the
	principal amount.
8.	CHARGES	The Facility will attract an all-inclusive charge of 10% per
	annum on the outstanding balance and payable monthly in
	accordance with the Transaction Documents.
9.	DISBURSEMENT	All amounts to be disbursed under the CBN-NEMSF must
	be as confirmed by NERC and the Market Operator and
	approved by the Refinancer. The Refinancer shall disburse
	the Facility for the following purposes:
	a. settlement of all Legacy Gas Debts owed to NGC
	and the gas suppliers; and
	b. settlement of all IRP Debts owed to the
	Beneficiaries.
	Provided that Disbursement shall only be made on the

	fulfilment (or waiver) of all the Conditions Precedent in
	the form and substance satisfactory to the Refinancer and
	in accordance with the Disbursement Agreements and
	provided further that the Disbursement shall be utilised in
	accordance with the Permitted Utilisation as defined and
	described in the Disbursement Agreements.
10.	BENEFICIARIES	Market Participants, Service Providers, NGC and gas
OF THE FACILITY	suppliers to whom IRP Debts and Legacy Gas Debts are
	owed.
11.	TERMS	OF	a.	The Collection Banks and the Principal Collection
ENGAGEMENT	OF	Bank, may in accordance with existing agreements
THE BANKS	with any DISCO, charge such fees as are payable
	by the DISCO for collections and other services
	undertaken by the Collection Bank and the
	Principal Collection Bank on behalf of and for the
	benefit of the DISCO in the normal course of
	business.
	b. The Banks shall, with respect to the CBN-NEMSF
	and the Accounts Administration Agreement, act in
	accordance with instructions given to it by the
	Refinancer based on the Transaction Documents
	and in the absence of instructions from the
	Refinancer, the Banks shall act (or refrain from
	taking action) reasonably in ensuring and protecting
	the best interest of the Refinancer.
	c.	The Collection Banks and the Principal Collection
	Bank shall transfer all funds under the CBN-
	NEMSF in accordance with their obligations under
	the Accounts Administration Agreement.
12.	CONDITIONS	a. Approval from CBN to each Mandate Bank to
FOR	participate in the CBN-NEMSF in an amount
PARTICIPATION -	approved by CBN.
MANDATE BANKS	b. Necessary approval of the Mandate Banks
	according to its internal processes authorizing each
	Mandate Bank to participate in the CBN-NEMSF
	under these Terms and Conditions stipulated by
	CBN and in the amount approved by CBN.
	c. Execution of the requisite Transaction Documents
	by the Mandate Banks.

13.	OBLIGATIONS OF	CBN
PARTIES	a.	Procurement of all requisite approvals for the
	CBN-NEMSF.
b. Establishment of the Refinancer and subscription
	to the debenture to be issued by the Refinancer
	pursuant to the Deed of Debenture.
Refinancer
a.	Compliance with these Terms and Conditions.
b. Monitor the process for the fulfilment of the
Conditions Precedent and Condition Subsequent to
Disbursement and ensure that such conditions
precedent are fulfilled in a manner and form which
is reasonably satisfactory.
c. Refinance the Lenders in accordance with the terms
of	the Amended and Restated	DISCO
Disbursement Agreement and the	DISCO
Disbursement Refinance Agreement to the amount
of the Commitment by each Lender.
d. Authorize and approve the Disbursement by the
Lenders	in	accordance	with	the relevant
Disbursement Agreements and	the	Liability
Transfer and Debt Settlement Agreement.
e. Procure	that	appropriate	mechanisms	are
established for the repayment of the Facility.
f.	Monitor the repayments being made with respect to
the Facility and ensure that there are no shortfalls in
the repayment.
g. Keep proper books of account and records of all
disbursements and repayments of the Facility.
h. Rendering periodic reports including accounts to
CBN.
i.	Adhere to all its obligations as stated in the relevant
Transaction Documents to which it is a party.

Mandate Banks
a. Compliance with these Terms and Conditions.
b. Transfer to the Refinancer in accordance with the
	terms of the Amended and Restated DISCO
	Disbursement Agreements the amount of the
	Commitment for each Mandate Bank for the
	purpose of Disbursement.
c. Not use any monies received under the CBN-
	NEMSF to repay or set off any existing or future
	secured or unsecured obligations or liabilities of
	any of the Market Participants.
d. Adhere to all its obligations as stated in the
	relevant Transaction Documents to which it is a
party.
Collections Banks
a.	Compliance with these Terms and Conditions.
b. Provide the Refinancer with a register of all
accounts operated by a DISCO and domiciled with
it.
c. Disclose all existing Feeder Collection Accounts in
respect of each DISCO to the Refinancer and shall
provide the Refinancer all relevant information
required in respect of the existing Feeder Collection
Accounts and newly opened Feeder Collection
Accounts.
d. Open and maintain the Feeder	Collections
Accounts in accordance with the terms of the
Account Administration Agreement.
e. Immediately notify the Refinancer upon receiving a
request to open any other account by a DISCO and
such account shall not be opened without the prior
written consent of the Refinancer.

f.	Immediately upon receiving either a written or
	verbal request to close a Feeder Collection
	Account, give the Refinancer notice of such request
	and the Feeder Collection Account shall not be
	closed without the prior written consent of the
	Refinancer.
g. Not exercise any right of set off on any monies
received under the CBN-NEMSF to repay or set off
	any existing or future secured or unsecured
	obligations or liabilities of any of the Beneficiaries.
h. Sweep all monies standing to the balance of the
Feeder Collections Account on a monthly basis to
the Principal Collection Account in accordance
	with the terms of the Account Administration
Agreement.
i.	Promptly	notify	the	Refinancer	of	any
circumstances within its knowledge and notice
which are likely to result in an event of default
under any of the Transaction Documents.
j.	Adhere to all its obligations as stated in the relevant
Transaction Documents to which it is a party.
Principal Collection Bank
a.	Compliance with these Terms and Conditions.
b.	Open and maintain a new Principal Collection
Account for the relevant DISCO in accordance with
the Accounts Administration Agreement.
c. Provide the Refinancer with details and all relevant
information of the Principal Collection Account
opened by the DISCO and domiciled with it within
5 working days of the request of such information
made by the Refinancer.
d. Not open any other Principal Collection Account
for the benefit of the DISCO without the prior
written consent of the Refinancer.
e. Not exercise any right of set off on any monies

	received under the CBN-NEMSF to repay or set off
	any existing or future secured or unsecured
	obligations or liabilities of any of the Beneficiaries.
	f.	Upon receiving either a written or verbal request to
	close a Principal Collection Account, it shall
	immediately give the Refinancer notice of such
	request and the Principal Collection Account shall
	not be closed without the prior written consent of
	the Refinancer.
	g. Promptly	notify	the	Refinancer of	any
	circumstances within its knowledge and notice
	which are likely to result in an event of default
	under any of the Transaction Documents.
	h. Adhere to all its obligations as stated in the relevant
	Transaction Documents to which it is a party.
14.	REPAYMENT	a.	Repayment of CBN-NEMSF shall be in accordance
	with the repayment schedule to be set out in the
	Amended and Restated DISCO Disbursement
	Agreement.
	b. All transfers to be made by the Principal Collection
	Banks to the Refinancer in repayment of the CBN-
	NEMSF shall be made without setoff, deductions or
	counterclaim.
15.	DEFAULT	If the Collection Banks or the Principal Collection Banks
INTEREST .	fail to transfer or remit any amount under a Transaction
	Document as at the due date of such transfer or remittance,
	interest shall accrue on the overdue amount from the due
	date up to the date of actual transfer or remittance at the
	defaulting Bank's prevailing maximum lending rate and
	payable by the defaulting Bank. This cost shall not be
	passed on to the DISCO.
16.	TRANSACTION	Disbursement of the CBN-NEMSF shall be subject to the
	satisfactory negotiation, execution and exchange of the
DOCUMENTS	Transaction Documents, in all respects to all parties
	concerned in the CBN-NEMSF. The Transaction
	Documents include but are not limited to the following:
	i.	Deed of Debenture;
	ii.	Participation Agreement;

	iii.	The Disbursement Agreements;
	iv.	DISCO Disbursement Refinance Agreement;
	v.	Accounts Administration Agreement;
	vi.	Liability Transfer and Debt Settlement Agreement;
	vii.	Administration Agreement
	any other document designated as a Transaction Document
	by the Refinancer.
17.	SECURITY	The security to be provided for the CBN-NEMSF shall be
	by way of a declaration of trust as set out in the Amended
	and Restated DISCO Disbursement Agreement over the
	line item in the invoices issued by the DISCOs
	representing the collection of the facility which has been
	provided in the MYTO 2.1 for repayment of the Facility
	and an obligation on the DISCOs to ensure such
	collections.
18.	APPLICATION OF	In addition to these Terms and Conditions, each of the
THESE TERMS AND	Mandate Banks, the Collection Banks, the Principal
CONDITIONS	Collection Bank shall execute a Participation Agreement
	substantially in the form annexed to these Terms and
	Conditions as Schedule A.
19.	CHANGES IN	a. A Mandate Bank may terminate its participation in
MANDATE	the CBN-NEMSF by giving 10 Business Days'
BANKS	notice to the Refinancer in which case the
	Refinancer shall appoint a bank licensed in
	accordance with BOFIA as a successor Mandate
	Bank.
	b. In the event of a breach by a Mandate Bank of any
	of its obligations as set out in these Guidelines or
	under a Transaction Document or in the event of a
	revocation of the banking licence of a Mandate
	Bank or on the appointment of a liquidator or other
	similar processes evidencing a winding up or
	liquidation of the Mandate Bank, CBN may
	immediately terminate the participation of the
	Mandate Bank in the CBN-NEMSF and CBN shall
	appoint a bank licensed in accordance with BOFIA
	as a successor Mandate Bank.
	c.	The terminating Mandate Bank under (a) above and
	the	Mandate	Bank whose participation is
	terminated under (b) above, shall make available to

	the successor Mandate Bank such documents and
	records and provide such assistance as the
	successor Mandate Bank may reasonably request
	for the purposes of performing its functions as
	Mandate Bank under the Transaction Documents.
d. A termination notice by the Mandate Bank or CBN
	shall only take effect upon the appointment of a
	successor Mandate Bank. CBN shall appoint a
	successor Mandate Bank no later than 30 days from
	the date of the termination notice under (a) or (b)
	above.
	e. A Mandate Bank who ceases to participate in the
	CBN-NEMSF by virtue of (a) or (b) above shall,
	notwithstanding that a successor Mandate Bank has
	not been appointed within 30 days from the date of
	termination notice, be discharged from further
	obligation in respect of the Transaction Documents,
	provided that the removed Mandate Bank shall still
	be liable to the Refinancer for any accrued
	obligations prior to such termination.
f.	Any successor Mandate Bank and each of the other
	parties under the Transaction Documents shall have
	the same rights and obligations amongst themselves
	as they would have had if such successor Mandate
	Bank had been an original party to the Transaction
	Documents.
20.	CHANGES	IN	a.	Upon receipt of any notice of termination from a
COLLECTION	DISCO, a Collection Bank shall immediately notify
BANKS	the Refinancer but in any event within 2 Business
	Days and the termination shall not be effective until
	a "	successor Collection Bank (licensed	in
	accordance with BOFIA) is duly appointed.
b. In the event of a revocation of the banking licence
	of a Collection Bank or on the appointment of a
	liquidator or other similar processes evidencing a
	winding up or liquidation of a Collection Bank, a
	Collection Bank shall no longer be eligible to act as
	a Collection Bank and its participation in the CBN-
	NEMSF shall immediately be terminated without
	more.

21.	CHANGES	IN	a. ADISCO may only terminate a Principal Collection
PRINCIPAL	Banks' participation upon giving 10Business Days
COLLECTION	prior notice of such termination to the Refinancer
BANKS	and ensuring that a successor Principal Collection
	Bank (licensed in accordance with BOFIA) accedes
	to these Terms and Conditions.
	b. In the event of a revocation of the banking licence
	of a Principal Collection Bank or on the
	appointment of a liquidator or other similar
	processes evidencing a winding up, a Principal
	Collection Bank shall no longer be eligible to act as
	a Principal Collection Bank and its participation in
	the CBN-NEMSF shall immediately be terminated
	without more.
22.	EVENTS OF	A Bank shall be said to be in default upon the occurrence
DEFAULT BY	of any of the events listed below;
BANKS	a. Opening and maintaining unauthorized accounts on
	behalf of any DISCO. Any account opened or
	maintained on behalf of a DISCO which is not
	designated a Transaction Account under the
	Accounts Administration Agreement is	an
	unauthorized account.
	b. Late or non-disbursement by the Lenders of sums
	due to the Beneficiaries.
	c. Late or non-remittance of repayment sums due
	under the CBN-NEMSF and held by the
	Collections Banks and the Principal Collection
	Bank in breach of the provisions of the applicable
	Transaction Documents.
	d. Carrying out rights of set-off with respect to any
	existing obligation or liability in relation to any
	monies received under the CBN-NEMSF.
	e. Breach of any of the terms of these Terms and
	Conditions.
	f.	Breach of warranties, undertakings and covenants
	under applicable Transaction Documents.
In addition to the terms of paragraph 21, where a Bank
allows the opening of an unauthorized account, the Bank
	17

	holding such account shall immediately transfer all credit
	balances in the account to the Principal Collection Account
	and close the unauthorised account within 2 Business Days
	upon notification by the Refinancer. CBN may terminate
	the participation of the relevant Bank in the CBN-NEMSF
	and the Refinancer shall not incur any liability for such
	termination.
	Further, on the occurrence of an event of default under this
	paragraph, the Bank shall be liable to pay a fine in an
	amount to be decided by CBN.
23.	DELEGATION OF	a. The Refinancer shall permit the Administrator
POWERS BY THE	appointed by the CBN as the Refinancer's duly
REFINANCER	authorized representative to exercise all rights and
	powers duly exercisable by the Refinancer under
	these Terms and Conditions in the name and on
	behalf of the Refinancer without prejudice to the
	Refinancer's right to exercise same.
	b. The Banks hereby acknowledge the delegation
	hereby made and covenant to cooperate with the
	Administrator in the exercise by the Administrator
	of any of the rights or powers of the Refinancer
	under these Terms and Conditions.
24.	TERMINATION	Termination of a Bank's participation in the CBN- NESMF
	shall be on the occurrence of any of the following events;
	a. Repayment in full of the amount owed by each
	DISCO under the Facility in accordance with the
	Transaction Documents;
	b. An event of default stated under paragraph 23 and
	under the relevant Transaction Document;
	c. A change of such Bank in accordance with
	paragraphs 20, 21, and 22.
25.	DURATION	These Terms and Conditions shall remain effective until
	full repayment of the Facility.
26.	TRANSFERABILITY/	a.	The Refinancer shall have the right to transfer to
ASSIGNMENT	one or more Persons the rights and obligations of
	the Refinancer.

b. The Mandate Banks, the Collection Banks and the
Principal Collection Banks shall not assign, charge,
encumber or otherwise deal with any of their rights
or obligations set out in these Terms and
Conditions or the Transaction Documents, or
attempt or purport to do so, without the prior
written consent of the Refinancer.
27.	AMENDMENT	These	Terms and	Conditions shall	be subject to
amendment from time to time as may be deemed necessary
by the CBN.

DAY OF DECEMBER, 2014 ISSUED THIS

Godwin Emefiele Governor of the Central Bank of Nigeria