The Federal Government has set up a Power Sector Investment Fund, to enable players in the industry have access to cheap – long term funds to develop the power sector.
Accordingly, “the financial resources for this special Fund will be pooled from the Federal Government, Development Financial Institutions (FDIs) as well as local, global and financial partners.”
President Goodluck Jonathan revealed this Monday at the opening of the International Conference on Power Sector and Infrastructure Financing at the State House, Abuja.
President Jonathan, who was represented by Vice President Mohammed Namadi Sambo, said “at present only 55% of our population have access to electricity. This arises mainly from the fact that Nigeria’s per capita electricity generation is relatively one of the lowest in global terms.”
Jonathan noted that the electricity supply from the national grid still remains as low as 50% and in order to meet the strategic national economic growth and developmental goals, as encapsulated in the Vision 20:2020 and the Transformation Agenda, decisive and courageous measure to work towards a 40,000MW target in the years ahead needs to be taken.
In order to provide avoidable refinancing and unlending services to the power sector, Mr. President said the Federal Government will make initial deposit of N300 billion to the Power Sector Intervention Fund while urging participants at the conference to join hands towards the success of the endeavour.
He also noted that government was 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. He said huge investments are made in other sectors of the economy such as building road network, telecommunications, railways, water resources, aviation and agriculture.
Jonathan, added that “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.
Commending the participation of the Nigerian private sector which effort ensured the raising of over US$2.5 million, Jonathan said government will continue to work with the private sector as drivers of economic growth.
He highlighted 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.
Earlier, 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, saying there was a transition from the dominated, monopoly of government and vibrant participation and transparent but regulated market of the private sector.
In her remark, the Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, gave a background of economic growth and assured that the returns in 2014 would be greater than that of 2013. She added that 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 investor expects from the huge market in the country with strong regulatory body such as National Electricity Regulatory Commission (NERC) and opportunities from gas, oil, coal, solid minerals, etc.
Goodwill messages were also taken from heads of delegation from different countries and financial institutions such as the African Development Bank and others including head of delegation from the United States of America, who said Nigeria remains a strategic partner with his country and will continue to invest in Nigeria. About 308 participants from across the world participated in the conference.