CBN disburses N109bn to support power reform, says Sanusi

Abuja –  The Central Bank of Nigeria (CBN) says it has disbursed over N109 billion to 20 companies in support of the ongoing power reform in the country.

The CBN Governor, Malam Sanusi Lamido Sanusi, disclosed this on Friday in Abuja at a Special Forum on `Financing the Power Sector Reforms for Economic Development’.

“The CBN provided 10 million U.S. dollar-grant to the Bureau of Public Enterprises (BPE) which is what financed the entire privatisation process.

“In the interim, we provided long term fixed single digit interest rate funds for power investments by manufacturers.

“We’ve disbursed over N109 billion to 20 companies and I believe we added about 500 mega watts of electricity generation capacity to this country,’’ he said.

Sanusi said the apex bank had reviewed potential guidelines recognising longer time formation for asset quality.

He also said that the CBN, in collaboration with the Ministry of Finance, was working to review the development financing institutions to create one institution that can finance development.

Sanusi said that lending for privatisation was the first step, but “the only way loan gets back to the banks will be if investment are made in the other value chain’’.

“If a bank puts money to fund a generating plant and the plant does not have gas, does not produce power, it will end up with a bad loan.

“Therefore, we need to look at all the investment going into gas, generation, metering, and transmission.

“I hope we recognise this as an important first and final step in financing the power sector,’’ he said.

Also commenting on bank lending to the power sector, Mr Andrew Alli, President African Finance Corporation, said the organisation had been the technical adviser to the CBN on power and aviation sectors intervention fund since the inception of the fund.

He said the corporation had disbursed about N226 billion to projects in both sectors with about N110 billion going into 23 unit power projects financed by eleven banks.

Alli said about seven projects were still waiting for disbursement from another six banks with total financing value of about N12 billion.

He named some of the sponsored projects to include Akute, an independent power plant that provides power to Lagos State, Dangote Cement in Obajana and Igbeshe and WABCO Nestle, among others.

“In terms of impact, we have financed about 790 megawatts, almost 800 megawatts of power, which is equivalent to 25 per cent of the power generated on the national grid,’’ he said. (NAN)