FG releases $550m to SWF to boost power sector projects

The Federal Government on Monday said $550 million had been released to the Sovereign Wealth Fund (SWF) managed by the Nigeria Sovereign Investment Authority (NSIA) for investment in the power sector.

The Coordinating Minister for the Economy and Finance Minister, Dr Ngozi Okonjo-Iweala said shortly after the opening session of the International Conference on Power Sector and Infrastructure Financing in Abuja, that $200 million of the amount would be deployed into the Infrastructural Fund of the NSIA to finance gas to power investments with the private sector.

She disclosed further that the balance of $350 million will go into a liquidity facility which the Nigerian Bulk Electricity Trading Company (NBET) will manage on behalf of the Federal Government to boost investors’ confidence in the power sector reform.

The minister said the additional $550 million released to the SWF represented an increase of over 50 per cent to the $1 billion take-off funding which the NSIA got at inception.

She explained that the objective of the $200 million that will be committed to the Infrastructure Fund vehicle of the SWF would generate catalytic funding for gas to power infrastructure which will leverage on available funds to boost the development of the power sector and improvement of power supply.

 “This is evidence that the investment which the country is making in the NSIA is increasing and the benefits of this investment will bear good fruit for the country. There is still work to be done but we are on the right track,” she said.

“The additional funds were derived from the $1 billion Eurobond which the country successfully floated last year, proceeds of which were set aside for financing power infrastructure.”

According to her, an agreement had been reached that the private sector partners will contribute an additional two dollars for every dollar invested by NSIA, indicating that the $200 million to be deployed into the gas to power infrastructure development has the potential of will generating up to $400 million more in additional private capital.

In his remarks, Managing Director of the NSIA, Uche Orji expressed the hope that the additional funding support by the Federal Government would boost ongoing efforts to enhance the infrastructure capacity in the power sector.

He assured that the management of the Authority would continue to look into the power generation and distribution infrastructure needs with a view to supporting ongoing agenda for improved electricity supply in the country

Specifically, Orji said NSIA was determined to fulfil its mandate by ensuring prudence management of its resources for national development advantage in the years ahead.

The NSIA, by the provisions of its enabling Act, is established to develop investment plans based on most effective policies and guidance targeted at achieving the aim of such investments and also empowered to reinvest all realized proceeds and dividends from and interest on portfolio investments of Funds into new or existing assets of the Funds.

The three Funds established by the Act are the  Future Generation Fund; Nigeria Infrastructure Fund; and  Fiscal Stabilization Fund with each fund holding at least 20 per cent  of the assets under management.

The NIF is targeted at making investments specifically related to and with the aim of assisting the development of critical infrastructure such as power generation, distribution and transmission, agriculture, dams, water and sewage treatment and delivery, roads, port, rail, airport facilities and similar assets in order to stimulate the growth and diversification of the Nigerian economy.

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