The Central Bank of Nigeria said yesterday it would provide N500 billion for investment in emergency power projects dedicated to industrial clusters in the country.

The funds is a debenture to be issued by the Bank of Industry (BOI) to banks at a maximum interest rate of 1 percent with a tenor of 10 to 15 years, CBN Governor Sanusi Lamido Sanusi said at a press briefing after the Monetary Policy Committee meetings in Abuja.

Banks are expected to invest the fund in 500MW in Lagos, 250MW in Kano, 200MW in Onitsha and Nnewi and 200MW in Port Harcourt and Aba.

Other areas to benefit from the emergency power funds are Funtua/Gusua/Malunfashi/Zaria with 200MW, Lokoja 200MW and Maiduguri/Gombe/Bauchi 200MW.

Power supply went down to its lowest level of 2200MW last week. It is currently put at 2600MW.

Sanusi said other power projects currently being financed by banks may also be refinanced from the N500 billion funds. He said banks will be required to secure the funds drawn from eligible securities.

“In addition, real sector projects certified bankable that emanate from the State Governors’ engagement with the Bankers’ Committee in line with the outcome of the Enugu Retreat will be accommodated under the facility”, the CBN governor said.

He said the debentures would be issued in accordance with Section 31 of the CBN Act 2007, at a concessionary interest rate of not more than 7 percent.

He said the MPC also approved in principle the extension of this facility to banks for refinancing and restructuring existing portfolios to manufacturers.

The final approval, he said, will come after the consideration of the report of a technical committee to be set up to work out the modalities for implementation within one month.

He said membership of the committee comprises the CBN, the Bankers’ Committee Sub-committee on Economic Development, Bank of Industry, Manufacturers Association of Nigeria and National Association of Small and Medium Enterprises.

Sanusi also said yesterday that federal government should implement the proposed deregulation of the petroleum sector.

He said the policy should be implemented because “you do not announce deregulation and then don’t do it because what is happening now is that everybody is paying a black market price.”

He said that everywhere, people buy petroleum products above the official price of N65. “If you buy N65 outside Lagos you have to stay in a queue for 24 hours,” he said.

He said most of what people see in inflationary pressure reflect the fact that “people have already factored in the new price of the expected price of petroleum products and if you actually deregulate, you would find that the increase in pricing is not going to be anything significant given the fact that people are use to it.”

Sanusi said Nigeria is in a situation in which “Nigerians are paying a black market price of petroleum products if they find it. Two, they are paying with inflationary cost of deregulation when it has not been done.”

Another one for us to watch.

BTW . . . .Since when do the CBN has to make such announcement?

I don't think retards (I mean government officials) will touch this money.

It's harder to loot bank money that oil money. The bank will need to be updated on quarterly fund allocations. Moronic leader who think they own the country won't like that.

strangleyo:

I don't think retards (I mean government officials) will touch this money.

It's harder to loot bank money that oil money. The bank will need to be updated on quarterly fund allocations. Moronic leader who think they own the country won't like that.

Well, if they would have good project manager to take care of the project and make sure it happened, then, it will be good

Fhemmmy:

Another one for us to watch.

BTW . . . .Since when do the CBN has to make such announcement?

Since we have had a governor that encourages transparency. Nigeria would be better off if the people were similarly informed by other arms of the govt and parastatals.

if sanusi pulls this off successfully,he's gonna get my support

biina:

Since we have had a governor that encourages transparency. Nigeria would be better off if the people were similarly informed by other arms of the govt and parastatals.

Yes oh . . . .all eyes on them to see if they will use this opportunity to change Nigeria for good.

samuelk:

if sanusi pulls this off successfully,he's gonna get my support

He will not only get my vote, but will respect him

@poster,
Can you Edit the subject of the thread as it does not reflect the actual amount.
A link to the source is also required.
On topic,
CBN funding the project further goes to shows the determination of the Government to put an end to the power issue as quickly as possible, my only fear is that it may also be another way to loot Tax payers money,
Fingers crossed,

kosovo:

@poster,
Can you Edit the subject of the thread as it does not reflect the actual amount.
A link to the source is also required.
On topic,
CBN funding the project further goes to shows the determination of the Government to put an end to the power issue as quickly as possible, my only fear is that it may also be another way to loot Tax payers money,
Fingers crossed,

i will assume that since banks will be involved, the money will be spent differently.
I at least hope

now every tom d1ck and harry will want to build a power station. . .lol

netotse:

now every tom d1ck and harry will want to build a power station. . .lol

As long as it will end the darkness in Nigeria, they could all go ahead.
As long as there is a way to evaluate what is being spent and see how it is done.

I think this model will work unless our brothers don't turn the loans into bad debts.

netotse:

now every tom d1ck and harry will want to build a power station. . .lol

I dont see the problem as long as the banks can be held honest,to ensure that the low interest loans are injected into the sector. I would have only liked the investments to include the transmission and distribution segments as well.

Sanusi is a brilliant man. He also obviously has plans for Nigeria. He is taking the initiative away from the Executive arm of Government on this.

Adequate power generation has been one of his favoured areas from which to jump-start the economy. Remember when he attacked the Seven-point agenda.

Hope he knows distribution is also a problem sha.

No matter how badly hated Sanusi bank reforms are perceived,I can bodly say without blinking an eye
that any man/woman that could take darkness away from Nigeria will be the best Nigerian of the century.

ziddy:

Sanusi is a brilliant man. He also obviously has plans for Nigeria. He is taking the initiative away from the Executive arm of Government on this.

Adequate power generation has been one of his favoured areas from which to jump-start the economy. Remember when he attacked the Seven-point agenda.

Hope he knows distribution is also a problem sha.

Dont start dancing yet, let us see the outcome . . . . .But for him to come with the idea, he is brilliant

ziddy:

Sanusi is a brilliant man. He also obviously has plans for Nigeria. He is taking the initiative away from the Executive arm of Government on this.

Adequate power generation has been one of his favoured areas from which to jump-start the economy. Remember when he attacked the Seven-point agenda.

Hope he knows distribution is also a problem sha.

I wouldn't get my hopes high. He is an a economist and banker, and can likely not see clearly beyond the financial/funding angle to the problem. His technical direction will likely be borne of the utterances of people who should know better like the minister of powe.
It is the minister of power that should seize the initiative to make sure that the funds made available indirectly by the CBN are directed to the right areas, and used to provide solutions to problems, but then the a guy who thinks power is measured in 'MW per day' wouldnt know much about that. When a person is unqualified, competence is a moot point.

biina:

I wouldn't get my hopes high. He is an a economist and banker, and can likely not see clearly beyond the financial/funding angle to the problem. His technical direction will likely be borne of the utterances of people who should know better like the minister of powe.
It is the minister of power that should seize the initiative to make sure that the funds made available indirectly by the CBN are directed to the right areas, and used to provide solutions to problems, but then the a guy who thinks power is measured in 'MW per day' wouldnt know much about that. When a person is unqualified, competence is a moot point.

Solving the problem of Nigeria does not need supernatural powers, it is common sense.
Since he has access to the money, i am sure he could get it done

Fhemmmy:

Solving the problem of Nigeria does not need supernatural powers, it is common sense.
Since he has access to the money, i am sure he could get it done

i hope by 'the problem of nigeria' you dont mean the power sector?

biina:

I dont see the problem as long as the banks can be held honest,to ensure that the low interest loans are injected into the sector. I would have only liked the investments to include the transmission and distribution segments as well.

actually, his idea makes more sense. . .cos if the funds are used entirely for captive generation then the companies will be able to charge the customers properly, and it will also benefit the economy much more this way.

ziddy:

Hope he knows distribution is also a problem sha.

Very true. Though you can only distribute what you have generated. So, let's generate first and then see how it goes.
Electricity is one commodity that doesn't have medium of storage. When you drill crude oil, it could be stored using tank farm, but in the case of electricity, it's not so. You consume as you generate, hence the need to also include the distribution along with the generation because they both go hand in hand. You can't separate them.

This is a welcome development. I pray it works out well.

Solving the power generation in Nigeria dont need any super natural being help.
We dont have to invent anything, all that is needed are already on the shelf.
We just need proper way to take care of it and make it happen

netotse:

actually, his idea makes more sense. . .cos if the funds are used entirely for captive generation then the companies will be able to charge the customers properly, and it will also benefit the economy much more this way.

charge which customers - the DisCos? We cant afford to address the issue serially, rather all phases should be tackled in parallel, even if it means prioritizing some states and/or regions i.e. put the money where it would have the most impact. Example I would take regular supply to the designated industrial areas above wasted capacity.

One factor that is worth considering (and am not sure if it is true) is if implementation time is lower for transmission and distribution, meaning they can lag generation in initiation.

I hope OBJ will not run away with the money again.

Fhemmmy:

Solving the power generation in Nigeria dont need any super natural being help.
We dont have to invent anything, all that is needed are already on the shelf.
We just need proper way to take care of it and make it happen

While the problem of the power sector does not require super natural abilities, it would take more than 'common sense' and money to solve.
There is a huge difference between the solution to a problem being straightforward and being trivial. The power sector problem in Nigeria is straightforward (if you know your onions) but is far from being trivial, and it would be a major misconception to trivialize it.

Fhemmmy:

Solving the power generation in Nigeria dont need any super natural being help.
We dont have to invent anything, all that is needed are already on the shelf.
We just need proper way to take care of it and make it happen

It's not just the power problem alone. I think it's virtually all our problems. None of them requires anything to be invented. Just that we have had complacent and corrupt leaders who lack the will-power to do any thing good. We have the money as a nation, the technologies are already existing, all we need is just procure and fix it. We have more than enough hands (local and expatriates) that can manage these things when operational. Just that the zeal and fervour are not there. This is a very big problem. It now looks as if we are inventing electricity, because in our society electricity is still as difficult to afford as rubi and emerald.

biina:

charge which customers - the DisCos? We cant afford to address the issue serially, rather all phases should be tackled in parallel, even if it means prioritizing some states and/or regions i.e. put the money where it would have the most impact. Example I would take regular supply to the designated industrial areas above wasted capacity.

One factor that is worth considering (and am not sure if it is true) is if implementation time is lower for transmission and distribution, meaning they can lag generation in initiation.

thats why i used the term captive generation, the industrial parks or whatever they're called will be turned into islands, so they wont be tied to the national grid(although there are ways to tie them in in such a way as to feed the excess power). . .prioritizing some states and regions is what we have on ground already,more importantly and since this is aimed at improving the economy, the 'masses' are not really important in the sense you're considering, what the CBN wants is to encourage industries i.e. create more jobs, you having light at home doesn't create more jobs


as per the idea you mooted, our distribution and transmission networks are already in a sorry state, cos for a while there has been little or no work done on them, most of the work has been on constructing new generating stations(although i admit a few new txn stations have been built), the networks are already overloaded in a lot of places(both on the transmission and distribution side) so i think it would be better for the private investors to concentrate on the OPS where they have a better chance of recouping their investments.

P.S. if they cater to the industries, in a sense it will increase the MW's available for non-industrial use. . .

@phemmy
we're talking about a professional sector, not something you go on training for 3-6months for. . .common sense is not the most important thing. . .relevant knowledge and skill are far more important.

netotse:

thats why i used the term captive generation, the industrial parks or whatever they're called will be turned into islands, so they wont be tied to the national grid(although there are ways to tie them in in such a way as to feed the excess power). . .prioritizing some states and regions is what we have on ground already,more importantly and since this is aimed at improving the economy, the 'masses' are not really important in the sense you're considering, what the CBN wants is to encourage industries i.e. create more jobs, you having light at home doesn't create more jobs


as per the idea you mooted, our distribution and transmission networks are already in a sorry state, cos for a while there has been little or no work done on them, most of the work has been on constructing new generating stations(although i admit a few new txn stations have been built), the networks are already overloaded in a lot of places(both on the transmission and distribution side) so i think it would be better for the private investors to concentrate on the OPS where they have a better chance of recouping their investments.

P.S. if they cater to the industries, in a sense it will increase the MW's available for non-industrial use. . .

Did you observe the proposed sites? Lagos, Kano, Onitsha, Nnewi, Port Harcourt, Aba, Funtua/Gusua/Malunfashi/Zaria, Lokoja and Maiduguri/Gombe/Bauchi.
Maybe I am missing something, but I dont see how it would be cost effective to site the stations in those areas and now transport the fuels to them. I dont think gas pipelines will be more cost effective than upgrading transmission system.

yourangeI:

It's not just the power problem alone. I think it's virtually all our problems. None of them requires anything to be invented. Just that we have had complacent and corrupt leaders who lack the will-power to do any thing good. We have the money as a nation, the technologies are already existing, all we need is just procure and fix it. We have more than enough hands (local and expatriates) that can manage these things when operational. Just that the zeal and fervour are not there. This is a very big problem. It now looks as if we are inventing electricity, because in our society electricity is still as difficult to afford as rubi and emerald.

Thank you jare.
We just lack management and proper usage of what we have.
Lack of need to do the right thing is sad too

biina:

Did you observe the proposed sites? Lagos, Kano, Onitsha, Nnewi, Port Harcourt, Aba, Funtua/Gusua/Malunfashi/Zaria, Lokoja and Maiduguri/Gombe/Bauchi.
Maybe I am missing something, but I dont see how it would be cost effective to site the stations in those areas and now transport the fuels to them. I dont think gas pipelines will be more cost effective than upgrading transmission system.

those are the industrial nerve centres of nigeria now, geometric power(barth nnaji) is doing something in aba and from the gist i hear, things are moving fast there (he's prolly the only serious IPP sef). . .

i think you're looking at this in terms of nigeria as a whole, not in terms of the nigerian economy, the question to ask is, would it be cheaper than using generators? and would both the investor and the industries being supplied profit from the arrangement? while i dont know the numbers that were/are being crunched, i think it would be a worthwhile venture. . .besides, the transportation problem you're talking about is principally for the north, and that's if gas is the fuel, i dont think the type of stations to be built were specified.

netotse:

those are the industrial nerve centres of nigeria now, geometric power(barth nnaji) is doing something in aba and from the gist i hear, things are moving fast there (he's prolly the only serious IPP sef). . .

i think you're looking at this in terms of nigeria as a whole, not in terms of the nigerian economy, the question to ask is, would it be cheaper than using generators? and would both the investor and the industries being supplied profit from the arrangement? while i dont know the numbers that were/are being crunched, i think it would be a worthwhile venture. . .besides, the transportation problem you're talking about is principally for the north, and that's if gas is the fuel, i dont think the type of stations to be built were specified.

Nice comment

netotse:

thats why i used the term captive generation, the industrial parks or whatever they're called will be turned into islands, so they wont be tied to the national grid(although there are ways to tie them in in such a way as to feed the excess power). . .prioritizing some states and regions is what we have on ground already,more importantly and since this is aimed at improving the economy, the 'masses' are not really important in the sense you're considering, what the CBN wants is to encourage industries i.e. create more jobs, you having light at home doesn't create more jobs


as per the idea you mooted, our distribution and transmission networks are already in a sorry state, cos for a while there has been little or no work done on them, most of the work has been on constructing new generating stations(although i admit a few new txn stations have been built), the networks are already overloaded in a lot of places(both on the transmission and distribution side) so i think it would be better for the private investors to concentrate on the OPS where they have a better chance of recouping their investments.

P.S. if they cater to the industries, in a sense it will increase the MW's available for non-industrial use. . .

@phemmy
we're talking about a professional sector, not something you go on training for 3-6months for. . .common sense is not the most important thing. . .relevant knowledge and skill are far more important.

biina:

Did you observe the proposed sites? Lagos, Kano, Onitsha, Nnewi, Port Harcourt, Aba, Funtua/Gusua/Malunfashi/Zaria, Lokoja and Maiduguri/Gombe/Bauchi.
Maybe I am missing something, but I dont see how it would be cost effective to site the stations in those areas and now transport the fuels to them. I dont think gas pipelines will be more cost effective than upgrading transmission system.

@biina,

I didn’t see where netotse mentioned gas pipelines unless I’m missing and/or misunderstanding something.

@ topic
I think it’s a brilliant idea from Sanusi if it is true. The source needs to be posted. I like the idea that even though the funding is being provided by the Government, it is being made available to the private sector through private banks. So it will be driven simply based on pure business risks and rewards and it won’t go the way of other Government funded projects.

Someone mentioned that every tom dick and harry will want to own a power station now. I don’t think so. The framework for getting power generation licenses are stringent and are not for the faint hearted. You have to know what you’re doing to get a license. Even if you didn’t know what you were doing, you’ll know by the time you get all the required documents (business plan, financial projections, EIA, design plans, project plans, etc).

I quite agree with netotse. You can’t build new power stations without upgrading the existing transmission and distribution network. Hopefully, banks will be encouraged to provide long time loans for prospective transmission and distribution business operators. Government will have to do more to privatise the transmission arm of PHCN because PHCN as currently owned cannot provide effective electricity network and a new entrant will not be able to compete with their monopoly business.

Bottom line, if you build generating plants that will come online by say 2013, their should be electricity network ready by that time that will get the electricity to the consumers without suffering too much transmission loss.  Otherwise, those investing in generation business will only get into debts they will not be able to pay!