The Central Bank of Nigeria (CBN) has said the refinancing of existing loans for captive power projects under its Power and Airline Intervention Fund (PAIF) for corporate entities that are not power companies will only be eligible, if the investments are not older than two years from the date of the application.
The apex bank stated this in a circular titled: "N300 Billion Power and Airline Intervention Fund Revised Guidelines," posted on its website Thursday
It, however, explained that such restriction would not be applicable to captive power projects implemented and managed by power companies, even as it insisted that gas-to-power promoters must tender verifiable evidence of off-taker purchase agreements for their projects to be eligible.
The revised guideline stated that the Asset Management Corporation of Nigeria (AMCON), by special approval of the CBN might be allowed to participate in the fund with respect to acquired projects of national economic importance.
In a bid to catalyse the financing of the real sector of the Nigerian economy, the central bank had, in accordance with Section 31 of the CBN Act 2007, approved the investment of the sum of N500 billion debenture stock issued by the Bank of Industry (BOI).
The sum of N200 billion was then set aside for the refinancing/restructuring of Small and Medium Enterprises/ Manufacturing portfolios while N300 billion was set aside for power and airline projects.
The objectives of the includes to fast-track the development of electric power projects, especially in the identified industrial clusters in the country; fast-track the development of the aviation sector of the Nigerian economy by improving the terms of credit to airlines and serve as a credit enhancement instrument to improve the financial position of the Deposit.
It was also intended to improve power supply, generate employment, and enhance the living standard of the citizens through consistent power supply.
The Africa Finance Corporation (AFC) serves as Technical Adviser to the Fund.
According to the guideline, any corporate entity, duly registered in Nigeria, involved in electricity power supply value chain that includes power generation, transmission, distribution, gas-to-power projects and associated services can access the fund.
It also said: "Eligible projects promoted by private or public sector sponsors (or a combination of both) but must be structured either as profit-oriented business or a public service, provided that contracted cash-flows or financing support exist to ensure repayment of principal and interest, as well as long term viability," can access the fund.
Similarly, it stated that any airline duly incorporated under the Companies and Allied Matters Act of 1990 and operating in Nigeria can participate in the fund. The facilities include long term loans (for new Power Projects), refinancing of existing loans (Power and Airline Projects), refinancing of existing leases (Power and Airline Projects), amongst others.