Abuja — The Federal government, yesterday, canvassed for massive foreign investments in the nation's power sector, even as it said that the sector requires $10 billion in the next five years to enable it add additional 5, 000 megawatts to the national grid.
President Goodluck Jonathan, who disclosed this at the international conference on power sector and infrastructure financing at the Presidential Banquet Hall in Abuja, also announced the establishment of Power Sector Intervention Fund, PSIF, designed for industry players to access cheap long term funds.
The Federal Government, he said will make initial deposit of N300 billion to the fund and therefore called on all participants to join hand towards the success of this endeavour.
He said: "To enable industry players have access to cheap-long term funds, government is hereby setting up a "Power Sector Intervention Fund.
"The financial resources for this special fund will be pooled from the Federal Government, Development Financial Institutions, DFIs, as well as local and global and financial partners.
"The Coordinating Minister of Economy will give details of the operational structure of the Fund. But, will essentially, provide avoidable refinancing and unlending services to the sector.
"On its part the Federal Government will make initial deposit of N300billion and I call on all participants to join hand towards the success of this endeavour.
"That is why it is expected that today's event will come up with practical funding strategies and help to facilitate the unlocking of the much needed capital for our infrastructural development.
Dr. Jonathan who was represented by the Vice President, Arch. Namadi Sambo, added that the country needed a total of $2.9 trillion for infrastructure development in the next 30 years under the national integrated infrastructure master plan.
He said the energy sector alone needed an infusion of about $900 billion while the power sector also needed about $10 billion for generation and distribution companies in the next few years in enabling us add additional 5,000mw to the national grid.
He explained further that, "in order to meet our strategic national economic growth and developmental goals, as encapsulated in the Vision 20:2020 and the Transformation Agenda, we needed to take decisive and courageous measure to work towards a 40,000mw target in the years ahead. "
This determination according to him informed our decision on reform and privatization.
He added, "similarly, our transmission network continues to attract serious attention. The transmission grid requires an annual investment of about $1.5billion for the next 5 years to ensure its reliability and stability.
"The Transmission Company of Nigeria, TCN, has commenced the aggressive implementation of the expansion blueprint funded by a mix of Appropriation and funds from financial and multilateral institutions," he said.
The President recalled that, "when we started our divestment programme in the Power Sector and their foreign partners, there was a lot of pessimism. However, it was the dynamism of the Nigerian private sector that ensured the raising of over US$2.5 billion that ensured the successful conclusion of the process.
" It is the belief of this Government that the private sector is better suited to effectively manage and attract the huge capital required for constant and affordable power to all Nigerians. This confidence on the Nigerian private sector stems from a track record of resilience, vibrancy, foresight and courage.
"In virtually all sectors of our national economy, this great show of enterprise, creativity and patriotism by our business community has kept our national economy strong, versatile and forward looking, "he said.
In another development, the local banks said they have invested a total sum of N750 billion naira to fund the Federal Government's power privatisation programme.
The Managing Director/CEO of Diamond Bank Plc Dr Alex Otti who spoke on behalf of the local banks at the opening session of the conference, said the fund was committed to various sections of the Nigerian Electricity Supply Industry, NESI.
Otti reiterated the commitment of the local banks to finance more investments in the next phase of the power sector owing to the significance of the sector reform initiatives.
The conference which was held at the State House banquet hall had over 310 foreign delegates and investors drawn from 29 countries including 50 financiers from the Islamic Development Bank, IDB, the World Bank, Stanbic IBTC Bank, and Standard Chartered Bank. Major local financiers at the confab include Ecobank, Diamond Bank, Fidelity Bank, Skye Bank, and the Heritage Bank.