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Funding for power transmission infrastructure hits $2.55bn

By BusinessNews Staff on June 14, 2014

The Federal Government has said the $2.55bn sourced from local and international organisations has been earmarked for the revamping of power transmission infrastructure.

This is coming as the Deposit Money Banks in the country have expressed fears over the bottlenecks confronting the new owners of the privatised power generation and distribution firms.

The bankers’ apprehension is based on the fact that most of the owners of the power firms borrowed massively from the banks to finance the acquisition of the companies.

The leader of the Bankers’ Forum and Managing Director, Heritage Bank, Mr. Ifie Sekibo, while speaking during a meeting held at the Federal Ministry of Power in Abuja on Thursday, said the banks were concerned about three key issues affecting them since the power sector was privatised.

He outlined the issues as the poor state of the country’s power transmission network, hitches in the supply of gas to the power plants, and absence of an intervention fund for the banks that were supporting the sector.

“We have not come here to complain considering the giant strides, which the government has recorded in the power sector, but the above concerns are what we want you to help us address,” Sekibo said.

The Minister of Power, Prof. Chinedu Nebo, in a bid to calm the fears of the bankers, said a lot of funds had been pumped into the sector.

He said, “You raised some concerns and Mr. President is addressing them through us his foot soldiers. The issue of transmission is vital because no matter what is generated, if it is not transmitted, it will not get to the Discos. Already, the National Economic Council has recommended and Mr. President has approved a sum of $1.6bn from the proceeds of the sales of NIPP projects just for transmission alone.

“In addition to that, the World Bank has brought in a substantial amount of money; more loans are coming in and this is in excess of $500m. From the Eurobond that was oversubscribed, we had about $135m just for transmission. From the African Development Bank, the amount that is) already being accessed is $150m just for transmission.”

[Punch]

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