CBN to increase N300bn power and aviation fund

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Written by Abdullateef Abubakar Jos

The bank said that it would further create amenable structures suitable to the peculiarities of the power sector.

It also said that the decision was one of the major planks of its banking sector economic development programme for this year.

``It 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 the 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 will require investments of at least 3.5 billion annually

over the next 10 years to meet the target,” the statement said.

Reports say that the CBN launched the Power Sector Fund in August 2010, with the objective of addressing the critical

finance needs and peculiarities of the sector as well as stimulating lending to it.

The fund is 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 seven per cent interest rate payable on a quarterly basis.

The fund covers refinancing of existing loans and leases as well as working capital for the sector.

The Banker’s Committee had during its 4th Annual Retreat in Calabar,Cross River state in December 2012, reaffirmed its

commitment to providing finances to the three key sectors of power, agriculture and transportation.