(http://naija2day.com/http%3A//naija2day.com/wp-content/uploads/2012/10/Naija2day.png//2013/01/Nigerian-Central-Bank.jpg) (http://naija2day.com/http%3A//naija2day.com/wp-content/uploads/2012/10/Naija2day.png//2013/01/Nigerian-Central-Bank.jpg)THE Central Bank of Nigeria (CBN) has unfolded plans to extend the N300 billion Power and Airline Fund (PAIF) with a view to increasing available funds for power sector projects and further create amenable structures suitable for the industry.
According to the apex bank, the extension is part of the banking sector's economic development programme for the year, noting that the extension will include the size, tenors, structures, projects, collaterals and other terms in a holistic approach to further align the financial system to the critical funding requirements of the power sector.
The power sector transformation is a major thrust of Federal Government's Transformation Agenda with a major target of generating 40,000MW by 2020.
However, it has been estimated that the power generation segment would require investments of at least $ 3.5 billion annually over the next 10 years to meet the target.
The CBN launched the power sector fund in August 2010 with the objectives of addressing the critical finance needs and peculiarities and stimulate lending to the power sector.
Managed by the Bank of Industry (BOI) under the technical assistance of the Africa Finance Corporation (AFC), the power fund prioritises key power projects and provides funds at an interest rate of 7.0 per cent payable on a quarterly basis. The fund covers refinancing of existing loans and leases as well as working capital for the sector.
Sources at apex bank's strategic financing thrust for 2013, said the extension is targeted mainly at increasing funding to the power sector but would also consider inputs from banks and other stakeholders on other structures and terms that would further improve the catalytic impact of the fund.
According to the sources, the extension of the power fund was in line with the responsibilities of the apex bank under the founding charter of the power fund.
Under the charter of the power fund, the CBN is saddled with articulation of clear guidelines for the implementation of the fund, provision and determining of the limits of funds, specification of the lending rate and review of review of the fund guidelines as may be necessary from time to time.
Eligible projects and companies for the power funds cover any corporate entity, duly registered in Nigeria, involved in electricity power supply value chain that includes power generation, transmission, distribution, gas-to-power projects and associated services.
The apex bank uses the auspices of the Bankers' Committee to enable banks articulate and strategize on ways to boost lending to the most critical sectors of the economy for sustainable growth.
The Banker's Committee had during its 4th Annual Retreat held in Calabar in December, 2012 reaffirmed its commitment to providing finances to the three key sectors of power, agriculture and transportation. The Committee noted that it decided to focus on the three key sectors because of the importance of the sectors for driving growth and development of Nigerian economy. (25)
naija2day
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