11 February 2014, Abuja – The Federal Government on Monday approved the establishment of Power Sector Intervention Fund with initial deposit of N300 billion to facilitate speedy development of the nation’s power sector.
President Goodluck Jonathan made this known at an International Conference on Power Sector and Infrastructure Financing at the Presidential Banquet hall, Abuja.
Jonathan, represented by Vice President Namadi Sambo, said that the setting up of the fund would enable industry players have access to cheap long term funds.
“To enable industry players have access to cheap long term funds, government is hereby setting up a “Power Sector Intervention Fund’’.
“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 for the 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 N300 billion.’’
Jonathan noted that under the National Integrated Infrastructure Master Plan about 2.9 trillion dollars was needed for infrastructure development efforts between 2014 and 2045.
He said the energy sector alone needed about 900 billion dollars in the next 30 years, saying that a significant percentage of the amount was expected to come from the private sector.
The president said that the power sector alone needed 10 billion dollars for Generation and Distribution companies to meet the target of additional 5,000 megawatts in the next few years.
According to him, the nation’s transmission grid requires an annual investment of about 1.5 billion dollars for the next five years to ensure its reliability and stability.
Jonathan challenged participants to come up with practical funding strategies and help to facilitate the unlocking of the much needed capital for the infrastructural development in the country.
He said already the Transmission Company of Nigeria (TCN) had commenced the aggressive implementation of the expansion blueprint funded by a mix of appropriation and funds from financial and multilateral institutions.
The president, therefore, called on the new operators of the sector to redouble efforts in ensuring the stabilisation of power supply in the months ahead.
“While expecting that this require time for both planning and sourcing of the needed resources, you must realise that Nigerians are looking unto you to go the extra miles in ensuring that visible and appreciable results are beginning to be seen by the end of June, this year.
“This is doable and I am confident that you are all up to this challenge,’’ he said.
Earlier, the Minister of Power, Prof. Chinedu Nebo, said the conference would come up with a financing framework that would meet the financial policy and requirement for the sector.
The Minister of Finance, Dr Ngozi Okonjo-Iweala, in her remark, gave a background of economic growth, and assured that the returns in 2014 would be greater than that of 2013.
According to her, the country’s economic fundamental is stronger and is good for the investor, especially with 7.9 growth from non-oil sector; single digit inflation and efforts by government to diversify the economy from oil.
The Minister of Trade and Investment, Olusegun Aganga, gave a vivid presentation of what the investors should expect from the huge market in the country with strong regulatory body such as National Electricity Regulatory Commission (NERC) and opportunities from gas, oil, coal and solid minerals.
Goodwill messages were also delivered by some heads of delegation from different countries and financial institutions such as the African Development Bank, and others.
About 308 participants from across the world participated in the conference.