BREAKING NEWS, Power
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Nigerian government is considering assisting power firms to secure loans from the Central Bank of Nigeria and the National Pension Commission at single-digit interest rates to boost electricity supply in the country
| By Anayo Ezugwu | Oct 5, 2015 @ 01:00 GMT |
THE federal government wants the Central Bank of Nigeria, CBN, and the National Pension Commission, PenCom, to provide funds at single-digit interest rates for the financing of electricity projects across the country. Godknows Igali, permanent secretary, federal ministry of power, said the government has already started talks with the two financial institutions with the aim of getting affordable loans for investors in the power sector to boost the supply of electricity.
The permanent secretary, who currently supervises activities in the power sector, disclosed this at an interactive workshop on ‘Interpreting and Understanding the Market Rules’ for the electricity market participants in Abuja on Monday, September 21. The workshop was organised by Infranet Energy Services.
A statement issued by the System/Market Operation Department of the Transmission Company of Nigeria quoted Igali as assuring the market participants that the ministry was discussing with relevant federal agencies such as the CBN and PenCom for the purpose of providing a pool of funds that could be accessed at single-digit to ramp up operations and service delivery.
He also said that bi-lateral discussions were ongoing with several international agencies on how to build flared-gas power plants, micro-grids and other renewable energy plants in order to provide more power for Nigerians. Igali charged the electricity market participants to imbibe best business practices, stressing that the sector was still going through a learning curve.
The permanent secretary expressed confidence that the current electricity challenges in the country would be surmounted with time, adding that the aim of privatising the sector would be achieved to position Nigeria on the path to sustainable industrial development.
Ngozi Osuhor, managing director, System/Market Operation, said the workshop was organised to enhance the understanding of the market rules and grid codes among industry players so as to achieve efficient and effective delivery of services. She stated that through the workshop, the department was performing one of its core responsibilities of providing education and capacity building for participants in the electricity business.
Similar workshops, Osuhor said, would be held on regular basis as a platform to continue the interaction and exchange of industry and operational knowledge among market participants. She stated that decisions on the way forward reached at the end of deliberations at the event would be sent to the electricity regulator for necessary follow-up.
Already, the CBN in 2014 provided N213 billion to the power sector as an intervention fund to mitigate the sector’s chronic illiquidity. Accordingly, the intervention fund was commercially sourced with stringent conditions attached to it to promote accountability.
The intervention facility was designed to address legacy gas debts which stands at N36 billion. Others are the execution of agreed metering programmes; procurement of transformers by distribution companies; execution of maintenance programmes; and procurement of equipment by generation companies.
The intervention fund was provided by the CBN in collaboration with deposit money banks and managed by a dedicated fund manager. Beneficiary companies were expected to repay loans obtained from the fund with a first-line charge on their revenues over a 10-year period.
PenCom on the other hand has yet to decide on how best to fund Nigeria’s infrastructure deficit with its accumulated pension funds which is now in excess of N4.6 trillion.
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