The Central Bank of Nigeria (CBN) has said that it will increase the N300 billion Power and Airline Fund (PAIF) to the power and aviation sectors, a statement said.
The statement, issued in Lagos on Tuesday, said that the development was with a view to increasing available funds for the execution of power projects in the country.
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.
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 in December 2012, reaffirmed its commitment to providing finances to the three key sectors of power, agriculture and transportation.
The committee noted that it decided to focus on the three key sectors because of their importance in driving growth and development of the Nigerian economy.