…Sets up Power Intervention Fund with N300bn Oscarline Onwuemenyi 11 February 2013, Sweetcrude, Abuja – President Goodluck Jonathan on Monday revealed that the country needs about $900 billion in the next 30 years to develop its energy sector.
Jonathan who spoke in Abuja at the on-going Nigeria Power Sector Investors Conference, also assured both local and international investors that the federal government was committed to the growth of a private led power sector.
The President who was represented by Vice President Namadi Sambo used the opportunity to call on the new operators of the sector to redouble their efforts in ensuring the stabilization of power supply in the months ahead.
He noted that, “Under our National Integrated National Infrastructure Master Plan, we need a total of US$2.9 trillion for our infrastructure developmental efforts in the next 30 years, that is 2014 – 2045. The Energy Sector alone needs an infusion of about US$900 billion during the period. Of this, a significant percentage is expected to come from the private sector.”
He added that the Power Sector alone needs about US$10billion for CAPEX of Generation and Distribution Companies in the next few years in enabling us add additional 5,000mw.
“Similarly, our transmission network continues to attract serious attention. The transmission grid requires an annual investment of about US$1.5billion for the next 5 years to ensure its reliability and stability. The Transmission Company of Nigeria (TCN) has commenced the aggressive implementation of the expansion blueprint funded by a mix of Appropriation and funds from financial and multilateral institutions.
“Government is also making new investments in coal to power as well as in renewable such as solar, wind and hydro power plants and major gas infrastructure. This infusion of resources from other sources will therefore go a long way in fully realising these efforts. In the rest of the economy, we are also making huge investments in other sectors including our road network, telecommunications, railways, water resources, aviation and agriculture,” the president added.
He explained that to assist operators of the sector have access to cheap – long term funds, government was setting up a Power Sector Intervention Fund with initial deposit of N300b.
“The financial resources for this special fund will be pooled from the Federal Government, Development Financial Institutions (DFIs) as well as local and global and financial partners. The Coordinating Minister of Economy will give details of the operational structure of the Fund. But, will essentially, provide avoidable refinancing and unlending services to the Sector. On its part the Federal Government will make initial deposit of N300billion and I call on all participants to join hand towards the success of this endeavour. That is why it is expected that today’s event will come up with practical funding strategies and help to facilitate the unlocking of the much needed capital for our infrastructural development,” he added.
On his part, the Managing Director of Diamond Bank, Alex Oti stated that local banks have so far invested about N750b into the power sector since the reforms started.
While commending government for creating the needed environment for investors to put their money in the sector, he assured that Nigerian banks were ready to do more business in the sector.
Also speaking, US Deputy Assistant Secretary of State for Energy Transformation, Dr. Robert Ichord, who led a 50-man delegation to the conference, applauded the Nigerian government pulling through the privatization process in the sector.
He however warned that attention in the world is shifting toward energy access to the poor and vulnerable in the society, especially in parts of Asia and Africa.
“Clearly we know that the future markets in power are in the emerging countries and Africa is going to be one of the leaders in that process and a very important market for investment in the future because 80 per cent of the electricity market in the future is coming from the continent. So these opportunities are enormous.”