Released October 25, 2011 | JOHANNESBURG
en
Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Johannesburg, South Africa)--An agreement between the U.S. and Nigerian governments will provide bankable funds for the purchase of goods and services for the expansion of Nigeria's electrical power infrastructure.
A memorandum of understanding for a $1.5 billion loan with a single-digit interest rate was signed between the Nigerian Minister of Power, Bart Nnaji, and the President of the U.S Export Import Bank (Ex-Im Bank), Fred P.Hochberg, in the capital, Abuja.
"The $1.5 billion is just a start. We want to deploy this financing as quickly as possible to help meet Goodluck Jonathon's goals for growing the Nigerian economy by greatly expanding the availability of power in the country. The bank's board of directors will certainly consider additional financing if needed. We are also interested in financing U.S exports in support of Nigeria's other infrastructure needs, which we understand may total over $220 billion between 2014 and 2016," said Hochberg.
Nigeria has ambitious plans to increase power production from the current level of 4,000 megawatts (MW) to 15,000 to 20,000 MW by 2015, and 40,000 MW by 2020.
Prospective investors in Nigeria's power sector will be expected to use the U.S. loan aimed at securing financial backup for the purchase of power equipment and services from U.S power equipment manufacturers. Projects will be structured on an independent power producer (IPP) basis, where the sale of power from the IPPs is supported by an adequate level of sovereign or other strong credit support.
Transactions under the power sector framework will be approved by Ex-Im Bank on a case-by-case basis, in compliance with the bank's credit, environmental, and other policies and procedures.
Nnaji said that government policies and programs to assure a cost-reflective tariff, a bulk power trading company that managed a government guarantee for power producers that supply distribution companies, and the ongoing privatization of public power generation and distribution companies are part of the government's initiatives and incentives to encourage private, foreign and local investors to assist in achieving the power targets.
The minister also explained that the U.S. had previously felt reluctant to commit funds to Nigeria's power sector because of obvious irregularities, but that the country's significant steps toward sorting these out had led to the $1.5 billion investment facility from the Ex-Im Bank.
Hochberg noted that the sale of U.S goods for the expansion of the Nigerian electricity infrastructure would create or maintain many jobs in both the United States and Nigeria.
Nigeria is one of nine countries in the world that the Ex-Im Bank has identified as offering U.S companies the greatest opportunities for sales. The other countries are South Africa, Turkey, India, Indonesia, Vietnam, Brazil, Mexico and Colombia. All have growing economies and significant infrastructure needs.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
A memorandum of understanding for a $1.5 billion loan with a single-digit interest rate was signed between the Nigerian Minister of Power, Bart Nnaji, and the President of the U.S Export Import Bank (Ex-Im Bank), Fred P.Hochberg, in the capital, Abuja.
"The $1.5 billion is just a start. We want to deploy this financing as quickly as possible to help meet Goodluck Jonathon's goals for growing the Nigerian economy by greatly expanding the availability of power in the country. The bank's board of directors will certainly consider additional financing if needed. We are also interested in financing U.S exports in support of Nigeria's other infrastructure needs, which we understand may total over $220 billion between 2014 and 2016," said Hochberg.
Nigeria has ambitious plans to increase power production from the current level of 4,000 megawatts (MW) to 15,000 to 20,000 MW by 2015, and 40,000 MW by 2020.
Prospective investors in Nigeria's power sector will be expected to use the U.S. loan aimed at securing financial backup for the purchase of power equipment and services from U.S power equipment manufacturers. Projects will be structured on an independent power producer (IPP) basis, where the sale of power from the IPPs is supported by an adequate level of sovereign or other strong credit support.
Transactions under the power sector framework will be approved by Ex-Im Bank on a case-by-case basis, in compliance with the bank's credit, environmental, and other policies and procedures.
Nnaji said that government policies and programs to assure a cost-reflective tariff, a bulk power trading company that managed a government guarantee for power producers that supply distribution companies, and the ongoing privatization of public power generation and distribution companies are part of the government's initiatives and incentives to encourage private, foreign and local investors to assist in achieving the power targets.
The minister also explained that the U.S. had previously felt reluctant to commit funds to Nigeria's power sector because of obvious irregularities, but that the country's significant steps toward sorting these out had led to the $1.5 billion investment facility from the Ex-Im Bank.
Hochberg noted that the sale of U.S goods for the expansion of the Nigerian electricity infrastructure would create or maintain many jobs in both the United States and Nigeria.
Nigeria is one of nine countries in the world that the Ex-Im Bank has identified as offering U.S companies the greatest opportunities for sales. The other countries are South Africa, Turkey, India, Indonesia, Vietnam, Brazil, Mexico and Colombia. All have growing economies and significant infrastructure needs.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
