Sovereign Wealth Fund gets additional $550m for investment

The Federal Government said on Monday it had given an additional 550 million dollars to the Sovereign Wealth Fund (SWF) for the development of infrastructure in the power sector.

The Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala, said this while briefing newsmen in Abuja.

Okonjo-Iweala said the Federal Government had realised that the sovereign wealth fund could use the funds made available to it to generate more monies from other investment partners.

“What we have decided to do is to infuse another 550 million dollars into the resources of the sovereign wealth fund for the sovereign wealth fund to manage.

“You will recall we took one billion dollar Euro bond; seven months ago we took that facility and at the time we took it, we told you it was meant for infrastructure development for the power sector.

“So, this money is still being invested to the power sector.

“All that we have done is that we have shifted the money to the SWF because we realised that it can generate additional monies, resources, from other partners if we hand the money to them,“ she said

According to her, 200 million dollars will be invested in gas-to-power infrastructure to help leverage up to 300 million dollars.

She added that the balance of 350 million dollars out of the 550 million dollars belonged to the Nigerian Bulk Electricity Trader (NBET).

“This is money that NBET holds in order to back up its finances to show the investors in the sector that they can be a good intermediary.

“So, what we said is why don’t we give it to SWF to manage on behalf of the NBET,“ she said.

Mr Uche Orji, the Chief Executive Officer, SWF, said that power was among the five sub-sectors that the fund would focus on in 2014 with especial interest on generation and distribution opportunities.

He identified the other four sectors as health, toll roads, real estate, and agriculture.

“In power we have a commitment from a private equity fund in U.S. who will commit two dollars for every one dollar that we invest.

“On top of that we have many other people who are interested in co- investing with us.

“So essentially, this will provide catalytic funding in the gas-to-power area for now and we expect to derive more investment from other investors,“ he said.

On infrastructure fund, he said more commitment would be made by the first quarter of 2014 to improve on the existing investment done in December 2013.

In real estate, he said SWF would help in mortgage financing and mass housing projects.

He added that the fund was in advanced discussions with two states on the issue.

According to her, the fund has also invested in agriculture to give share infrastructure for small holder farmers and agro-processing.

“For the health sector, we have signed a memorandum of collaboration with three (hospitals), one federal medical centre and two teaching hospitals to look at opportunities to provide specific PPP investments in healthcare.

“When we met last time, I told you we had 15 per cent unallocated as part of our overall fund, we have allocated that 15 per cent as at the beginning of December 2013 to both infrastructure fund and future Generation fund equally,“ he said.

Orji said that at the moment, 20 per cent had been allocated to stabilisation, 40 per cent to infrastructure, and 40 per cent to future generation fund.

The chief executive officer added that 55 per cent of the future generation fund was invested in the equity market and other money-making instruments while six mangers were selected to manage the fund (NAN)