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NSIA to attract more fund for infrastructure

By BusinessNews Staff on September 8, 2015

The Managing Director, Nigeria Sovereign Investment Authority, Mr. Uche Orji, has said the agency will attract more funding for investment in infrastructure projects.

Orji, who said this during an interaction with journalists in Abuja, explained that the NSIA would achieve this through the setting up of a special facility that would aid the investment of pension funds asset in infrastructure.

As of July this year, the country’s pension fund asset stood at N4.9tn. Orji said the facility, which is to be called the Nigeria Credit Enhancement Facility, was being worked on in collaboration with GuarantCo, a company from the United Kingdom.

He said the facility would assist the country in bridging the current infrastructure gap which, according to the Federal Government, stood at N2.2tn annually.

He said, “We are in dialogue with pension fund companies, the financial institutions, regulators and other stakeholders on the setting up of the Nigeria Credit Enhancement Facility.

“Without this, it will be difficult for pension funds to be invested in infrastructure. We are still at the development stage and the capital raised through this will be intense.

“The money that can come into this kind of initiative is pension fund. As oil price is down, what we are trying to do now and in 2016 is to go into co-investments by using our money to attract investments.”

On progress so far made on the Second Niger Bridge, he said the NSIA was still committed to actualising the project. Already, he said the agency had invested the sum of $2.21m (about N435.4m) in the project.

He said out of the 44-kilometre bridge which would be constructed over a four-year period, the NSIA would only be responsible for the financing of 11 kilometres.

The project, according to him, is structured as a Public Private Partnership that will be constructed and operated on a design, build, finance, operate and transfer basis.

He said the project was initially estimated to cost N108bn excluding duties and Value Added Tax, noting that if duties and VAT are included, the project cost would rise to N117.9bn.

Orji said, “This is a national project and there is a lot of traffic on that bridge. The project has a nationwide impact because it’s a trade route across the country as it will open up economic activities.

“As oil prices continue to fluctuate, infrastructure is a good way for the economy to go.

“Work is still ongoing at the Second Niger Bridge and we are hoping to get all the funding that we need for the project. It’s a four-year project and we are hoping to get to financial close.”

Giving a breakdown of the $2.21m spent by the NSIA, he said that a total of $247,586 was spent on the due diligence phase and $1.96m on the project development phase.

[Punch]

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