Ecobank Nigeria Pledges Massive Funding For Power Sector

Posted by African Examiner Business News, Uncategorized Tuesday, March 4th, 2014

Kayode Adelowokan, Lagos

Ecobank Nigeria has projected Power sector funding of at least $5 billion per annum over the next five years starting from 2014.

This is according to the bank’s policy to support the growth and development of the Power sector in Nigeria, being its own contribution to the sector’s transformation initiated by the Federal Government through its privatization programme.

Also Ecobank has played a major role on the Buy-Side of the Power Sector Privatization Exercise by providing Financial Advisory Services, Lead Arranger Role, Acquisitioning Financing and Guarantees to Distribution Companies (DISCOS) , Generating Companies (GENCOS) and National Integrated Power Plants (NIPP).

The bank’s Country Head, Power & Energy, Olufunke Jones, stated that the bank’s objective is focused on playing actively at all levels of the sector’s privatization which includes Distribution, Transmission and Generation. She said Nigeria has one of the largest gaps between demand and supply for electricity.

To bridge this gap the country requires a combination of favorable government policies, private sector participation and Foreign Direct Investment (FDI) as well as transparency and persistent monitoring that will guarantee an improved business environment.

Jones also said the current power reforms have created opportunities for Capital Expenditure (CAPEX) and Operating Expenditure (OPEX) funding which is a consequence of the handover to the new owners.

In her words “there is the urgent need to rehabilitate the distribution networks in order to make them robust and flexible enough to accommodate the nation’s demand for power”.

Also commenting, Mrs. Funmilola Ogunmekan, Local Account Manager, Corporate Banking Group said unlike the telecoms industry where new investors were able to take advantage of new technologies to redefine industry norms; the power sector is faced with the challenges of upgrading mostly obsolete equipment and processing under a traditional technology framework. Adding that this, amongst others, is the immediate challenge before the potential of the industry is fully manifested.

Ogunmekan reiterated that in 2014 Ecobank will leverage its position as a bank with the 3rd largest branch network to provide effective Utility Collections and Cash Management services while providing the required additional CAPEX/OPEX funding requirement for at least five of the Distribution Companies across the country.

Ecobank has partnered with these companies to put in place an effective and seamless Utility Collection System devoid of leakages and supported by a robust IT infrastructure.

The bank has provided Bid Bond Facilities to some of the major approved contractors in line with National Electricity Regulatory Company expectations, for the Credited Advanced Prepaid Metering Implementation (CAPMI) Scheme. The objective of the CAPMI scheme is to make Prepaid Meters available for Willing Customers.

Ecobank will continue to partner with the players in the Power Sector so as to achieve the Transformational Agenda of the Government.