The Managing Director of Stanbic IBTC, Mrs Sola David-Borha, said that some Nigerian banks had raised three billion dollars (N465 billion) as acquisition finance in the pre-privatisation of the power industry. David-Borha disclosed this at the ongoing West African Power Industry Convention (WAPIC) in Lagos.
She said that the amount was used in the acquisition of assets to facilitate the transformation of the sector, to boost power supply in the country. David-Borha said that the banks’ participation in the power sector had been in the area of electricity and renewable energy, both across the country and on the continent.
“Stanbic IBTC was the only foreign bank involved in the project that was widely regarded as risky. The banks also supported the industry during post–privatisation, which is seen as the most critical aspect of the process,’’ the managing director said.
According to her, the World Bank projected that 1000 mega watts is the required wattage need of one million people.
She said that based on the World Bank‘s projection, then, the country needed about 170,000 mega watts for its population, compared to its present 3,000 mega watts.
David-Borha said that the development called for huge financing, to close up the gap and for the power sector to come on board. She called on all stakeholders to come together to address the challenge of effective power supply through access to capital that would close the supply gap.
“Banks as financiers will always take into consideration options that will attract more investment into the country. However, at the present stage, the power industry has been encouraging investors to show interest in terms of dollar value. Which makes investment in the industry, which is still calculated in naira value, more profitable,’’ she said.
David-Borha identified the need to ensure that there were requirements for running capital and reduction in tariff, for service not enjoyed by the customer.
The managing director said that Nigeria’s power, in the next five to ten years, was expected to wax stronger and be listed at the Nigerian Stock Exchange (NSE).
According to her, this would also make power projects to be more bankable.
She urged the government to ensure that inflation and interest rates were monitored, to encourage investors.
Mr Eluma Obibuaku, Vice President (Power) at the Africa Finance Corporation (AFC), said that the corporation had always supported projects in the power sector in many African countries. Obibiaku said that majority of the corporation’s investment in the power industry had been in electricity and solar energy.
“The AFC has invested in power businesses in countries like Togo, Ivory Coast, Nigeria and some North African countries. African government should focus more on renewable power to boost supply across the West African region,’’ he said.
Obibiaku noted that the cost of solar energy in recent times had gone down, compared to ten years ago. The vice president added that as the cost of solar energy continued to decrease, a lot of initiatives would spring up.
