Nigeria: Bank chiefs worry over sluggish power sector

Power transformer13 June 2014, Abuja – Managing directors of banks under the umbrella of the bankers’ forum have raised alarm over the poor progress in the recently privatised power sector.

A delegation of the managing directors of the major banks in the country led by Heritage Bank’s MD, Mr Ofie Sekibo, to the minister of power, Thursday, outlined their concerns to include the poor state of the country’s power transmission network, the recurring obstacles in the supply of gas to power plants and the lack of intervention fund for banks that are supporting the sector.

Sekibo appealed to the minister to help fast-track the coming on board of an intervention fund that will provide banks with necessary muscle for power related projects.

But Minister of Power Prof. Chinedu Nebo told the bank chiefs that about $1.6 billion (N262 billion) has been disbursed by the National Economic Council to improve power transmission network in the country.

Nebo said the money would be sourced from the legacy assets of the National Integrated Power Projects (NIPP) that are currently being privatised by government.

Giving the breakdown Nebo said, additional $500 million was procured from the World Bank and $150 million from the African Development Bank (AfDB) respectively to address the current transmission problem.

Prof. Nebo also said transmission is the life-wire in the electricity value chain, so much so that sooner than later Nigeria will attain a near acceptable capacity of 120 percent of power generation for transmission’s capability which ideally should be 150 percent capacity ahead of generation target for transmission.

He tasked the bankers to participate actively in the unfolding opportunities that have been thrown up in the power sector, saying that banks should make loans available to those desirous of buying shares in the privatised companies.

Prof. Nebo expressed his excitement at the support of Nigerian banks to the ongoing privatisation in the sector, arguing that the ugly past experienced in the power sector can never come again, just as he vowed that no stone will be left unturned to grow the nation’s economy through provision and access to power.

The banks at the last privatisation exercise financed about 70 percent of the total amount used in purchasing the Power Holding Company of Nigeria assets by the private operators.

Nigerian banks provided N280 billion in the privatisation process.

– Daily Trust

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