FG, GE sign $350m power financing deal

General Electric03 February 2014, Abuja – The federal government, at the weekend, signed a $350 million deal with General Electric (GE) to support the construction of small-scale power projects across Nigeria.

The Minister of Industry, Trade and Investment, Mr. Olusegun Aganga, while speaking at the signing ceremony in Abuja, said the deal would fast-track the federal government’s ongoing efforts towards providing adequate power supply to industrial zones, as well as Small and Medium Enterprises (SMEs) across the country, in line with the Nigerian Industrial Revolution Plan.

Aganga and his counterpart at the Ministry of Power, Prof. Chinedu Nebo, signed on behalf of the federal government, while the Global Chairman, GE, Jeff Immelt and the Chief Executive Officer, Stanbic IBTC, Sola David-Borha; signed on behalf of their organisations. The fund would be managed by Stanbic IBTC Nigeria.

Speaking during the event, Aganga said the new initiative was in furtherance of the ‘Country-to-Company’ partnership between Nigeria and GE in the area of attracting investments into critical sectors of the Nigerian economy.

The minister said: “We are very excited about what GE is doing in Nigeria. I was truly more excited when last year, the Global Chairman/CEO of GE, Jeff Immelt and I signed the $1billion commitment to invest in Nigeria. In fact, that commitment became a reality when in June 2013, the ground-breaking took place in Calabar. This is a demonstration that the Country-to-Company partnership between Nigeria and GE in attracting investment into the critical sectors of our economy is on course.

“Today, we are signing the $350million financing deal for small-scale power projects in Nigeria. These small-scale power projects are quicker to do because they can be accomplished within one year. What has happened today is the kind of initiative that we need to drive our economy in terms of providing power to our industrial zones across the country, especially in places like Kano where there are big textile industries, where the cost of production is not as competitive as it should be due to the lack of uninterrupted power supply.”

He added: “Therefore,  I am much more excited than anyone else because this initiative  is aimed at financing a critical sector that will be a catalyst for our country’s economic development because it will not only support our Small and Medium Enterprises and our Industrial Revolution Plan. Finance is a big constraint for infrastructural development in Nigeria. So, having this in place will address one of the enablers to growing the power sector.

“The interesting thing is that GE is not looking at investing in the power sector alone, but they are also committed to investing in locomotive assembly, establishment of health care and diagnostic centres, and enterprise development. This is why I regard our partnership with GE as a productive Country-to-Company partnership.”

On his part, Immelt said the company’s interest to invest in Nigeria had been bolstered by the power sector privatisation, which he said was one of the most transparent globally.
“GE is a global infrastructure company with businesses in 160 countries around the world. Electricity is one of the great enablers of economic growth and development. First of all, I must commend the Nigerian government because I have visited many countries and I want to say that the privatisation programme in Nigeria is one of the best I have seen.

“It is still in the early days but I am encouraged by the kind of things that I have seen and heard while I have been here. I have met with a lot of people and there is a lot of interest from inside and outside the country to invest in Nigeria. It is technology that is needed and that is what our company, GE, will provide. But financing is a big part of how the power sector has to develop.
“I am very happy working with the Nigerian government and Stanbic IBTC in terms of what is needed in terms of debt and equity financing that will allow the sector to accelerate.”

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