10th February, 2014
Nigeria’s Federal Government said on Monday that it has set up a Power Sector Investment Fund through which players in the sector can have access to cheap – long term funds for the development of the power sector.
The funds will be pooled from the Federal Government, Development Financial Institutions as well as local, global and international financial partners.
This was revealed by President Jonathan at the opening of the International Conference on Power Sector and Infrastructure Financing at the State House, Abuja.
The President who was represented by Vice President Namadi Sambo noted that only 55 per cent of Nigerians currently have access to electricity with the result Nigeria’s per capita electricity generation is one of the lowest globally.
He added that in order to meet the strategic national economic and developmental goals, as encapsulated in the Vision 20:2020 and the Transformation Agenda, the country must take courageous measures that will ensure that it is able to achieve 40,000MW electricity generation target in the years ahead.
The President therefore said the Federal Government will make initial deposit of N300 billion to the Power Sector Intervention Fund.
He added that government is making new investments in coal to power as well as in renewable energy such as solar, wind and hydro power plants and major gas infrastructure.
This, he said is in addition to huge investments are made in other sectors of the economy such as building road network, telecommunications, railways, water resources, aviation and agriculture.
But the President said the Government cannot provide all the funds needed to be invested into the sector, hence the need for vigorous private sector participation.
“It is obvious that government alone cannot fund the infrastructural deficit in Nigeria, especially given the trend in the global economy, hence the conference has come at an appropriate time as opportunities abound in the country making it an obvious destination of priority for Foreign Direct Investment,” said the President.
The President also noted that under the National Integrated Infrastructure Master Plan, government needs US$2.9 trillion for infrastructural development efforts in the next 30 years (2014-2045); Energy sector needs US$900 billion during the period; power sector needs US$10 billion for CAPEX of generation and distribution in the next few years to add 5,000MW and Transmission network needs US$1.5 billion in the next five years.
The Minister of Power, Prof. Chinedu Nebo, said the conference was to come up with a financing framework that would meet the financial policy and requirement for the sector. The Minister said the sector has transited from the dominated, monopoly of government to vibrant participation and transparent but regulated market of the private sector.
Also speaking at the event, the Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, said 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.