US EXIM bank backs Nigeria’s power sector reform with $1.5 billion

Oscarline Onwuemenyi

19 October 2011, Sweetcrude, ABUJA – The Federal government on Wednesday announced that it has secured a major window of financing for Nigeria’s ailing electricity power sector with the unveiling of a $1.5 billion lifeline for the sector by the United States Export-Import Bank, US-EXIM Bank.

Minister of Power, Prof. Barth Nnaji, who made the announcement at a signing ceremony with US-EXIM Bank in Abuja, stressed that the facility was ready for contractors, independent power producers and relevant stakeholders with bankable projects to access.

At a ceremony witnessed by key officers of the US embassy in Nigeria and Nigeria’s embassy in the US, both parties agreed that the facility would commence immediately and called on contractors, independent power producers and relevant stakeholders to come up with bankable requests to access the money.

According to Nnaji, “Today is a very important day for us in Nigeria because this is an endorsement and a show of confidence by our foreign partners in steps taken by the Federal government to revitalize the power sector. We are looking forward to using this facility to closing the gap of funding in the nation’s power sector.”

Nnaji noted that the government has undertaking numerous measures towards ensuring better investment climate for power companies in Nigeria, further pointing out that the issue of investor friendly tariff has been addressed.

“We will get the independent power producers to take advantage of this facility to expand their projects in Nigeria. There are also tremendous opportunities in renewable energy for those willing to invest in it.

“We thank the EXIM bank for the confidence reposed in us. We assure you that we ill make full use of the confidence.”

The Minister further commended the efforts by the US-EXIM Bank to the privatization agenda of government.

Signing on behalf of his bank, the Chairman of the US-EXIM, Mr. Fred Hochberg stressed that the financing window was just the first of many other infrastructure related support he would be facilitating for Nigeria.

He said, “$1.5 billion is just a start. We want to deploy this financing as quickly as possible to help meet President Goodluck Jonathan’s goals for growing the Nigerian economy by greatly expanding the availability of power in the country. The bank’ board of directors will certainly consider additional financing if needed.”

Hochberg explained that he was optimistic that the window of financing for American equipments and other related goods and services for the power sector would create a good number or maintain jobs in the US and Nigeria.

“Increased, reliable power in Nigeria is widely accepted as central to the growth of the Nigerian economy. Nigeria intends to increase power output from the current four gigawatts level to 15-20 gigawatts by 2015 and 40 gigawatts by 2020,” he said.

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