26 March 2012, Sweetcrude, ABUJA – Nigeria has signed a $10 billion agreement with General Electric (GE) to build 10,000 megawatts power plants in the country.
The the Memorandum of Understanding (MoU), signed on Sunday in London, provides for the construction of series of power plants in the country.
Minister of Power, Prof. Barth Nnaji, who signed the agreement on behalf of the Nigerian government, disclosred that unlike in the past when GE supplied the country only equipment, the company wil, under the MoU, now become an equity participant in projects.
“In the past, GE only supplied the equipment but now, they will be investing 10 to 15 per cent in equity for every single project, the government will match them in such investment, while the private sector will bring the balance,” Nnaji stated.
Nnaji told newsmen that the government would tap a small percentage of the National Pension Fund to finance some of the power projects, adding: “What the pension money is meant for is investment, but you invest in more secure instrument and this project is one of them.
“Pension Fund is a secure fund, so you cannot play around with people’s retirement money, so it is very important that everyone understand that the plan is not to just take the money and invest in project that are risky.”
He further said: “There are not many projects that are more secure than the power plants. Investment in this sector is constant because people must buy electricity, while government provides the guarantee,” as he explained that “infrastructure, including road tolls and transmission lines, were guaranteed income earners, because charges accruing from them can fund the borrowed money from the pension fund”.
Nigeria signed a similar MoU with GE in 2009, but Nnaji said the new agreement was more detailed in specifics.
