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Sanusi Calls for Bank of Infrastructure

By on July 19, 2012

The Governor of the Central Bank of Nigeria, Lamido Sanusi, has called for the establishment of an Infrastructure bank for the financing of infrastructure projects across the country.

He made the call whilst addressing the Third Infrastructure Concession Regulatory Commission (ICRC)Public- PrivatePartnership (PPP) stakeholders forum in Abuja whilst delivering a paper titled, “The role of development finance institutions in infrastructure development in Nigeria”.

Sanusi said, “The bank could be financed from funds recovered from petrol subsidy removal and equipped with professional and qualified management recruited globally. Funding could be by way of non-callable tier-two capital, returning a decent rate of return to the Ministry of Finance.

““In terms of lending, the proposed bank could lend to projects based on a selection criteria with a moratorium of up to seven years at single digit interest rates repayable over 20-30 years. The government would earn money from the interest and share of the PPP arrangements. The operating and management fees, consultancy and project management, as well as loan loss provisioning could be covered by a minimal yet competitive spread.

He added that the legislation establishing the bank “could have a requirement where a  minimum of 70 per cent of the Bank’s portfolio must be invested in hard infrastructure ( seaports, airports, railways, highway, power plants etc), while 30 per cent can be reserved for financing procurement (e.g., ships, trains, aircrafts etc).”