HomeBusinessSanusi Recommends Multiple Financing Options For Nigeria's Power Sector

Sanusi Recommends Multiple Financing Options For Nigeria’s Power Sector



Governor of Nigeria's Central Bank Lamido Sanusi

Central Bank of Nigeria (CBN) Governor, Sanusi Lamido Sanusi Wednesday recommended a cocktail of financing options in the nation’s power sector, saying Nigerian banks have demonstrated great willingness to back sector’s reform programme, they are not so liquid to be left alone to provide the huge capital requirement needed to finance projects in the sector.

He proffered a multiple long-term financing approach sourced from the banks, capital market, insurance, and other sectors, noting that rather than channel the N2 trillion accumulated Pension Fund into subsidising fuel imports, the funds should be effectively used to finance power projects.

Sanusi, who delivered a keynote address in Abuja at a one-day technical workshop on the power sector, noted that getting the power sector right will take 150 million Nigerians out of poverty.

Speaking on “The Role of the Banks in the Privatisation of the Power Sector”, which he delivered extempore, Sanusi who provided an insight into the huge investments needed to finance the power sector when fully privatised, noted that while the banks have been actively involved in financing projects and would continue to do so, they however lack the liquidity to do it alone.

“Let’s look for a way of unlocking part of the N2 trillion Pension Fund. The money is all locked up. Instead of using the money to subsidise importation of petroleum products, let’s use it to finance power projects,” the CBN Governor suggested.

He said the banking sector is committed to playing its inter-mediatory role, disclosing that the CBN had approved N60 billion for five power projects and assured that the apex bank would support projects in the sector to the extent that its balance sheet could permit.

Sanusi, who also assured that the CBN would be willing to give the necessary guarantees to banks willing to go into financing power projects, appealed to the Securities and Exchange Commission (SEC) to lower the cost of raising funds from the capital market.

In his presentation, Special Adviser to the President on Power, Prof. Barth Nnaji, said activities in last few months had bolstered investor confidence in the sector unlike in the past when there was no funding and non-participation of the private sector in the system.

“Now we ensure that investors have to be protected by government policies. The framework is intended to ensure that investors will be comfortable when they come. About a year ago, the reform was not going well but today government has moved forward to ensure investors come. Now banks are playing a role, this they did not do before,” he said.

He noted that the Nigerian electricity supply chain needed vast amounts of investment – at each point in the value chain, adding that, the capital required is enormous and that government cannot fund even a fraction of the necessary investments as only the private sector can provide the needed funds.

Nnaji, who noted that for these investments to take place on the requisite scale requires a complex series of interlocking reform interventions, said their have been huge challenges facing the power sector reforms.

Director General, Director General, Ms. Arunma Oteh said the capital market apex regulatory body will review issuance costs to allow people source funds from the market, in order to boosts investment in the power sector.

- Advertisment -

Trending Articles