everyones always bashing Sanusi. I know a banker who steals money like a goat and hasn't been doing it since Sanusi cause Sanusi audits them every week, so for this reason alone i like the guy, but i dont know the details about him.

BUT, in the middle of me trying to teach these nigerians that the government in no functional country provides electricity for it's people and INSTEAD the private sector does, Sanusi, a private sector man, does exactly what im trying to prove.

[size=15pt]CBN's N500 Billion Power Fund to the Rescue[/size]
Oscarline Onwuemenyi
There is no gainsaying the fact that the greatest challenge of Nigeria's power industry apart from issues surrounding adequate gas supply to power plants and widespread and endemic corruption is the one of poor financing for the sector.

The near collapse of the nation's power sector has been a direct result of poor or inadequate funding over the decades, and where in recent past such funding is provided, it has been found to make its way into the private pockets of people who are supposed to be managing the resources in the sector.

It is therefore with a mixture of excitement and cynicism that stakeholders in the sector welcomed the recent announcement by the Central Bank of Nigeria (CBN) of a N500 billion investment facility towards developing about 2,000 megawatts of power projects across major commercial and industrial cities in the country.

The CBN had at the end of the 213th Monetary Policy Council (MPC) Meeting on March 2, 2010, underlined the need for energizing reforms in critical sectors of the economy such as power and other economic infrastructure.

It decided, therefore, to continue with the quantitative easing policy by providing N500 billion facility for investment in debentures issued by the Bank of Industry (BOI) in accordance with Section 31 of the CBN Act 2007, for investment in power projects dedicated to industrial clusters.

According to the apex bank, the funds are to be channeled through the BOI for on-lending to DMBs at a maximum interest rate of 1.0 percent for disbursement of loans with a tenor of 10 15 years at concessionary interest rate of not more than 7.0 percent. Projects to be covered under the facility include 500MW for Lagos , 250MW for Kano , 200MW for Onitsha/Nnewi axis, and 200MW for Port Harcourt/Aba. Others include 225MW for Kaduna , 200MW for Funtua/Gashua/M-Fashi/Zaria, 200MW for Lokoja, and 200MW for Maiduguri/Gombe/Bauchi.

Speaking during the briefing, the Governor of CBN, Dr. Lamido Sanusi, noted that the nation's economic growth has been slowed by the crisis in the power sector, adding that government's ambition to grow the industrial base of the country and create jobs for the citizens was put in jeopardy by the epileptic energy situation.

To forestall the mismanagement of the, Sanusi added the fund would be channeled through the Africa Finance Corporation (AFC), pointing out that the institution has the expertise and global network to grow the fund and attract other facilities for investors in the power sector.

According to him, "It is expected that this fund will act as catalyst for the sector and through the participating banks more facilities could be attracted pointing out that the apex bank was worried over the low performance of the real sector of the economy which gave rise to many investors rushing to the capital markets few years ago. We felt that we need to push this fund into a sector that will encourage development and growth of the real sector and that was why we are looking at Power and industrial cluster areas but now that we know from your presentation what other requirements are, CBN will look at this fund will have to do a thorough job by incorporating all of this."

Sanusi cautioned on the need to avoid debt overhang and added that CBN statement was meant to provoke discussion so that the very best will come out of this scheme and for the benefit of all. He concedes that based on the financing needs of the power sector, the N500 billion is like drops of water into the ocean. "We know that N500 billion is a small amount when you look at the kind of investment required to get the power sector back on its feet, but we believe that it would have a significant impact on the sector, especially because the AFC that will be adviser on the fund would be able to attract more funding from abroad for this cause."

The CBN governor stressed that the AFC has qualified competent to manage the fund and any local bank that will participate in the scheme will have to meet AFC conditions for such business.

Meanwhile, the former Minister of Power, Dr. Lanre Balalola has advised the management of the CBN that a technical team be set up between his Ministry and the country's apex bank in order to ensure a holistic and effective application of the N500 billion set aside to boost development in the power sector.

The establishment of a technical team, Babalola said, was necessary because investment in power must take cognisance of the transmission, distribution and fuel supply if we are to avoid building white elephants or plants that will only work part of the time.

"We need to adopt a holistic approach on this issue by addressing all variables in a technical manner and the viability of such projects in the identified area," he noted.

He explained that this is the type of structure used worldwide to promote private sector in the development of power projects, adding that even in Africa, Ghana, Cote d'Ivoire and Algeria have used this structure to good effect.

According to him, not only is significant funding required in generation but also in transmission, distribution and fuel supply to effectively produce and deliver power to Nigerians for domestic and economic use.

He said there was the need to avoid the mistake of the past in citing and executing power projects where all the variables required for a functional and viable project are not properly considered before rushing into their development.

Babalola specifically stated that in addition to providing debt finance, CBN could further facilitate private sector investment and participation by playing a prominent role in the provision of guarantees and securitization, which are critical for ensuring long-term sustainability of power plants.

The former Minister listed other conditions that CBN should consider for effective utilisation of the facility and development of the power sector, including the establishment of a fund for the sector that provides credit support for Independent Power Projects. He added that, "A more central role should be played by the CBN in the provision of guarantees and securitization arrangement. The Bank should also provide assistance with hedging of foreign exchange rates."

Other alternatives suggested by Babalola Minister include the need for wider consultation with the Ministry of Power, NERC, PHCN, and TCN playing critical role in the development of the power system. "There should be awareness that solutions require a holistic approach which is not just generation focused but include not just transmission and distribution also the reform and deregulation of the sector," he stated.

Many experts on the sector have lauded the proposed funding for the sector, noting particularly its target of commercial and industrial clusters. They, however, noted that while it is the Federal Government's desire to reduce its funding of power sector projects, private investors should be given a level of comfort via the provision of guarantees and other forms of protection from investment losses in order for them to play a leading role in the new initative.

They argue that this funding does not have to come from the coffers of the government as international organisations like the World Bank, IMF and the UNDP can provide guarantee funding. It is therefore imperative that such agencies are carried along as the country proceeds with the reform programmes.

In an interview with our correspondent, the Country Director of the World Bank in Nigeria, Mr. Onno Ruhl emphasised the need for proper financing of the sector to be streamlined to give investors enough confidence in the sector. In addition to such guarantees, he said, other measures should be taken to send the right message to investors on the viability of investing in Nigeria 's electricity industry. Beyond persuading investors about the huge returns that can be reaped, adequate information on available policies to protect investors' interests is critical.

A key priority for most foreign investors will be the nature of regulations that clearly define and allow exit for investors and infrastructure.

In addition to focusing on power generation Ruhl said the country should lay emphasis on transmission and distribution. "It is not enough to focus on building generation plants, transmission is important too. It is a long-term issue that Nigeria has to look at, there is not enough investment over time, and the sector has reached a stage where it can not improve unless there is a conscientious effort to attract private investment," he said.

Beyond the issue of low investment in the sector over time, he said the government must ensure that appropriate tariff was collected from electricity consumers. He said the tariff been collected did not cover the cost of producing electricity, thus making it difficult, if not impossible, to carry out regular maintenance in the sector.

The World Bank's Senior Private Sector Specialist, Mr. Steven Dimitriyev, had in a recent press conference attributed the high cost of investment in Nigeria to electricity crisis, noting that private sector involvement holds the key to the rehabilitation of the sector. According to him, Nigeria 's economic growth was stunted as a result of the the epileptic state of the nation's power sector.

"Electricity crisis is the most important infrastructure bottleneck in Nigeria today. It is the main driver of Nigeria's high indirect cost," he said. Dimitriyev further stressed that unreliability of electricity costs an average 10 percent of sales per year to a typical Nigerian firm. "All types of firms experience power outages and 85 percent of them own generators, this is higher than any of Nigeria's comparator countries," he said.

LOL i can't wait to see these ppl boo hoo about not having an 'enabling environment' now.
this article is proof to nigerians that they don't know what they're talking about. Look at a private secotr man like SNAUSI bringing electricty to nigeria cause IT WILL MAKE HIS BANK A LOT OF MONEY AND HE'S NOT DENSE AND SHORT SIGHTED LIKE YOU PEOPLE.

Ikengawo:

everyones always bashing Sanusi. I know a banker who steals money like a goat and hasn't been doing it since Sanusi cause Sanusi audits them every week, so for this reason alone i like the guy, but i dont know the details about him.

BUT, in the middle of me trying to teach these nigerians that the government in no functional country provides electricity for it's people and INSTEAD the private sector does, Sanusi, a private sector man, does exactly what im trying to prove.



LOL i can't wait to see these ppl boo hoo about not having an 'enabling environment' now.
this article is proof to nigerians that they don't know what they're talking about. Look at a private secotr man like SNAUSI bringing electricty to nigeria cause IT WILL MAKE HIS BANK A LOT OF MONEY AND HE'S NOT DENSE AND SHORT SIGHTED LIKE YOU PEOPLE.

_{dont mind them you are very smart and optimistic
what is the name of his bank again? what is the full meaning of CBN?}

Central Bank of Nigeria
it's not 'his' but he's the head. Again, im not going to speak about him too much cause i dont know the details that may cause someone to hate him, which is happening a lot, but from what i see he's great and has stopped stealing that my friends dad was doing.

my friends dad used to send him 5000, 10,000 just for nothing and he would squander the money and get more. the minute sanusi came his dad got audited and demoted, now he (the son) has to find a job LOL

I thought power generation was being privatized totally. So I hope this bond is going to be like a loan to the power companies.

nex:

I thought power generation was being privatized totally. So I hope this bond is going to be like a loan to the power companies.

yes that is what it is, for companies targeting industrial areas mainly

Ikengawo:

Central Bank of Nigeria
it's not 'his' but he's the head. Again, im not going to speak about him too much cause i dont know the details that may cause someone to hate him, which is happening a lot, but from what i see he's great and has stopped stealing that my friends dad was doing.

my friends dad used to send him 5000, 10,000 just for nothing and he would squander the money and get more. the minute sanusi came his dad got audited and demoted, n[b]ow he (the son) has to find a job LOL[/b]

Dis Guy:

_{dont mind them you are very smart and optimistic
what is the name of his bank again? what is the full meaning of CBN?}

LOL, I cant stop laughing at this your question. You asked him the right question and the way u put it made me roll on da floor.
I have asked the guy b4 how old he is and wht he is wasting his parent's money studying there in the US. ;

Dis Guy:

_{dont mind them you are very smart and optimistic
what is the name of his bank again? what is the full meaning of CBN?}

[size=14pt]Kai! unu wicked for dis NL o! [/size]
Dat question is a brain breaker! Dimwits beware!

@Ikengawo
2 tablets of Panadol is in order.

www.nairaland.com/attachments/180447_ROTFLMAO_gif3d0c775232c7f27cf80592785b9635b6

I tire 4 dat ikengawo of a guy, so off point in his reasoning

LOL im not reasoning with you unreasonable criminal people, im posting specific facts and evidence to back my points while you ppl are made that you can't argue it with your tradition of speculation and manic despressive pessimism

Dis Guy:

_{dont mind them you are very smart and optimistic
what is the name of his bank again? what is the full meaning of CBN?}

Sarcasm!!!!

says a bus driver in the UK named Violent.

Ikengawo:

says a bus driver in the UK named Violent.

you have something against bus drivers? or are you just naturally gifted at idiocy?

^bus driver.