US Offers FG $1.5bn For Power Expansion

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Nigeria and the United States yesterday signed a memorandum of understanding (MoU) that would enable independent power producers in the country to access up to $1.5 billion facility to purchase equipment and services from the United States.

The facility is managed by the United States Export-Import Bank (Ex-Im Bank), a government agency that provides export-credit insurance and financing, among other services, to help foreign buyers purchase US goods and services.

The minister of power, Prof. Bart Nnaji, signed the MoU on behalf of the Nigerian government while Mr. Fred P. Hochberg, Ex-Im Bank chairman and president, signed for the government of the United States at a brief ceremony in the ministry’s conference room.

Nnaji described the agreement as historic, as it gives investors in the power sector access to US goods and services which would boost Nigerian’s bid to expand its electricity infrastructure.

Hochberg promised that the Ex-Im Bank would do more: “$1.5 billion is just a start. The bank will certainly consider additional financing if needed,” he said.
Asked when the facility would be available, he said that the bank had opened for business in Nigeria and was awaiting orders from credible independent power producers.

“We want to deploy this financing as quickly as possible to help meet President Goodluck Jonathan’s goals for growing the Nigerian economy by greatly expanding the availability of power in the country,” he said.

Nnaji commended the speed with which the bank’s president responded to the issue which he raised with Hochberg only a couple of weeks ago in Washington when the minister represented President Goodluck Jonathan at an economic summit meeting.

He spoke of government’s initiatives to expand investments that would lead to a three-fold increase in the quantum of power within three years, and the incentives that are being put together to encourage private foreign and local investors to achieve the target.

Among these are government policies and programmes to assure a cost-reflective tariff, a bulk power trading company that manages a government guarantee of payment for power producers who supply to distribution companies, and the on-going privatization of public power generation and distribution companies.

He also commended Nigeria’s ambassador to the United States, Prof. Ade Adefuye, who facilitated the visit and accompanied the team, for pushing forward Nigeria’s current economic diplomacy initiative.

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