15 February 2014, Sweetcrude, Abuja – The Nigerian Government has established a Power Sector Investment Fund to enable players in the industry access cheap funds for long term development in the power sector.
President Goodluck Jonathan represented by Vice President Mohammed Namadi Sambo said this during the opening ceremony of the International Conference on Power Sector and Infrastructure Financing at the State House, Abuja recently. Adding, only 55% of the Nigerian population has access to electricity presently and this arises mainly from the fact that Nigeria’s per capita electricity generation is relatively one of the lowest in global terms.
According to him, the financial resources for the special fund will be pooled from the Federal Government’s Development Financial Institutions (FDIs) as well as local, global and financial partners. He also averred that the electricity supply from the national grid is still as low as 50% and in order to meet the strategic national economic growth and developmental goals contained in the Vision 20:2020 and the Transformation Agenda, decisive and courageous measures towards the 40,000 megawatt target in the years ahead needs to be taken.
“To provide avoidable refinancing and unending services to the power sector, the Federal Government will make initial deposits of N300 billion to the Power Sector Intervention Fund and participants should join hands towards making the endeavour a success,” he reiterated.
He also noted that his government is making new investments in coal to power and renewable energy such as solar, wind and hydro-power plants as well as major gas infrastructure; indicating that huge investments have been engaged in other sectors of the economy like the construction of road networks, telecommunications, railways, water resources, aviation and agriculture.
“It is obvious that government alone cannot fund the infrastructural deficit in Nigeria, especially given the trend in the global economy. Therefore, the conference has come at an appropriate time as opportunities abound in the country, making it obviously the destination of priority for Foreign Direct Investments,” he added.
While commending the participation of the Nigerian private sector whose efforts have galvanised over US$2.5 million, President Jonathan said that the Government will persist on working with the private sector as drivers of economic growth. He disclosed that under the National Integrated Infrastructure Master Plan, the government requires about US$2.9 trillion for infrastructural development in the next thirty years (2014 – 2045) and the energy sector needs US$900 billion during the period.
The power sector, he explained needs US$10 billion for CAPEX generation and distribution in the next few years, in order to add 5,000 megawatts and the transmission network needs US$1.5 billion in the next five years.
Speaking earlier, the Minister of Power, Chinedu Nebo said that the conference was earmarked to spring up financing frameworks for gaining the financial policy and requirements for the sector, adding that there was a transition from the monopoly of government to a vibrant participation with a transparent but regulated market in the private sector.
In her remarks at the occasion, the Minister of Finance, Ngozi Okonjo-Iweala recalled Nigeria’s economic growth processes and assured that the returns in 2014 would be greater than that of 2013. She further stated that the country’s economic fundamental is stronger and good for the investor, especially with 7.9 growth from the non-oil sector, single digit inflation and efforts by government to diversify the economy from oil.
Also speaking, the Minister of Trade and Investment, Olusegun Aganga expatiated on the expectations of investors from the huge market in the country and its strong regulatory body – the National Electricity Regulatory Commission, NERC, as well as opportunities from gas, oil, coal and solid minerals, among others.
Goodwill messages were also presented by the heads of delegations from the African Development Bank and the United States of America. The Head of the United States delegation stated that Nigeria is a strategic partner with his country, adding that it will continue to invest in Nigeria. About 308 participants from across the world participated in the conference.