Sanusi Lamido Sanusi
The Central Bank of Nigeria (CBN) has said it plans to extend the N300 billion Power and Airline Fund (PAIF) with a view to increasing available funds for power sector projects.
A statement yesterday said the proposed extension of the fund was one of the major planks of the apex bank’s economic development programme for this year.
This would also include the size, tenors, structures, projects, collaterals and other terms in a holistic approach to further align the financial system to the critical funding requirements of the power sector.
The CBN launched the PAIF in 2010 with the objectives of addressing the critical finance needs as well as to stimulate the sectors. Managed by the Bank of Industry (BOI) under the technical assistance of the Africa Finance Corporation (AFC), the fund prioritises key power projects and provides funds at an interest rate of seven per cent payable on a quarterly basis. The fund covers refinancing of existing loans and leases as well as working capital for the sector
On the other hand, the power sector transformation is a major thrust of Federal Government’s Transformation Agenda with a major target of generating 40,000megawatts by 2020. It had been estimated that the power generation would require investments of at least $ 3.5 billion annually over the next 10 years to meet the target.
It added: “The extension is targeted mainly at increasing funding to the power sector but would also consider inputs from banks and other stakeholders on other structures and terms that would further improve the catalytic impact of the fund.
“This is in line with the responsibilities of the apex bank under the founding charter of the power fund.”
Under the charter of the power fund, the CBN is saddled with articulation of clear guidelines for the implementation of the fund, provision and determining of the limits of funds, specification of the lending rate and review of review of the fund guidelines as may be necessary from time to time.
“This initiative could help to quickly unlock the potential benefits of the power sector reform,” it added.