FG sets aside $300m risk guarantee
Abuja – The Federal Government says it has set aside 300 million dollars as a partial risk guarantee to protect investors in the power sector.
The partial risk guarantee is a risk-sharing mechanism that provides banks with a partial coverage of risk exposure against loans made for energy efficiency projects. This is contained in a statement issued by Mr. Olawale Rasheed, the Special Assistant (Media) to the Minister of State for Power, Alhaji Mohammed Wakil at the weekend in Abuja.
The statement quoted Wakil as saying this at a discussion on Power Sector in Africa organised by the U.S. Department of Commerce in Miami, Florida. According to the minister, the fund is domiciled with the Central Bank of Nigeria (CBN) and the World Bank. The minister, in his keynote address at the event, said the Federal Government had lined up series of incentives to strengthen investors’ confidence and guarantee return on investment in the sector.
He said that waivers and tax holidays had also been put in place for power equipment importation for generation, transmission and distribution. He assured investors that return on their investment was guaranteed, saying that very attractive tariffs regime had been put in place for investors in renewable energy sector. “The government of Nigeria has achieved what industry experts described as one of the most holistic, ambitious and transparent privatisations of power assets in recent times.
“The distribution and generation assets have all been successfully handed over to the private sector since November 2013,” the minister said. On the Power Africa initiative sponsored by the U.S., he said that Nigeria was poised to take advantage of the initiative as a strategic opportunity for securing the much-needed investment in the sector.
Wakil explained that a Power Africa Desk had since been established at the Federal Ministry of Power to serve as a one- stop-shop for stakeholders in the industry. According to him, the desk is to attract investments to the Nigerian power sector based on funding and technical assistance provided by the Government of the U.S.
The statement quoted the U.S. Department of Commerce as saying that next month, U.S. Secretary of Commerce, Penny Pritzker, would embark on a trade mission to Nigeria, Ghana and Ethiopia to promote U.S. exports to Africa. “This is with a view to helping U.S. companies launch or increase their businesses in the energy sector in West Africa,” it said.