W3vina.COM Free Wordpress Themes Joomla Templates Best Wordpress Themes Premium Wordpress Themes Top Best Wordpress Themes 2012

Banks to invest N598bn in power sector – FG

Deposit Money Banks in the country
are gearing up to
invest over $3.623bn (about N598bn) in the
power sector, the Federal Ministry of Power has
Figures contained in the latest Power Enabling
Nigeria publication for the second quarter of 2014
showed that the banks had adopted different
models in a bid to raise funds that would enable
them to finance the sector.
Among the models adopted by the banks are the
sale of dollar-denominated bonds, issuance of
Eurobonds and raising funds from the equities
market to invest in the privatised power industry.
The over $3.623bn investment is in addition to the
$1.3bn total banking loans to the sector in 2013
for the electricity distribution companies and
$1.7bn for the power generation firms.
According to the report, the interests of the DMBs
were heightened by the fact that private sector
investors had taken over Nigeria’s power sector.
This, it stated, had led to a boom in the demand
for generation, distribution and transmission
facilities such as aluminium conductors, meters,
transformers, cables, transmission towers and
other accessories.
It outlined the banks with interests in the power
sector to include Zenith Bank Plc, Diamond Bank
Plc, Union Bank of Nigeria Plc, Access Bank Plc,
Sterling Bank Plc, Skye Bank Plc, Fidelity Bank Plc,
Guaranty Trust Bank Plc and First Bank of Nigeria
Detailing the magnitude of financial investments
by the banks in the sector, the power ministry
said, “Zenith Bank Plc sold its $500m dollar-
denominated bond. The bank had explained that
the proceeds would enable it to finance the
power sector. Similarly, Diamond Bank Plc issued
its debut $200m five-year Eurobond. The bank
also plans to tap into the equities market to raise
about $300m.
“Diamond Bank is seeking to raise $500m
additional capital also for the growth of the
Nigerian power sector; while Union Bank Plc is
seeking approval to raise $750m, Access Bank Plc
at its recently held Annual General Meeting got
approval of its shareholders to raise $1bn.
“Sterling Bank recently disclosed plans to issue a
$200m Eurobond early next year, while Skye
Bank, which raised N50bn last year, is also eyeing
the Eurobond market.”
It was further gathered that other banks that had
also tapped into the Eurobond market to raise
funds for the power sector were Fidelity Bank,
Guaranty Trust Bank and First Bank.
The Federal Government, in the report, dismissed
claims that the power sector was bankrupt.
It stated that as the funding from the banks was
rolling in, other internationally recognised power
firms as well as some governments had expressed
interests in the industry, stressing that “the
Nigerian power sector is not broke as some
persons would like the world to believe.”
Senior power ministry officials told our
correspondent that the latest N213bn Central
Bank of Nigeria intervention fund had made the
banks, which hitherto had developed cold feet in
power sector financing, to review their decisions
in order to work out ways to strike funding deals
in the industry.
The Federal Government recently announced new
measures to address financing related issues in
the power sector.
Top among the measures was the provision of the
N213bn intervention facility to settle legacy gas
The Minister of Petroleum Resources, Mrs. Diezani
Alison-Madueke, stated that the facility, which
would be provided by the CBN through the banks,
would also be used to address revenue shortfall
in the power sector.
According to her, inadequate gas supply for
power generation is one of the three major issues
affecting the sector.

%d bloggers like this: