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AFDB Approves $155m Loan for Nigeria’s Power Sector

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Electricity - Investors King
  • AFDB Approves $155m Loan for Nigeria’s Power Sector

The Africa Development Bank says it has approved a loan of $155m for Economic and Power Sector Reform Programme in Nigeria.

The Senior Communications Officer of AfDB, Fatimah Alkali, in Abuja on Friday said that the loan became effective in October, 19, 2012.

Recent media reports had indicated that there might be a face-off between the Senate and the Federal Government on plans to secure a facility of 174 million dollars from AfDB.

The media reports also revealed that part of the security for the loan was the handing over the management of Transmission of Company of Nigeria to AfDB.

The reports hinted that AfDB would second three of its staff to take over the management of TCN for six months and would terminate the appointment of current management of TCN.

To this end, the AfDB, in its statement, said that the appointment of the management TCN was a prerogative of the Nigerian authorities and not that of AfDB

It stated that the loan was aimed at improving power systems, business environment and sustaining growth through sound macroeconomic policies and budget priorities.

AfDB said the amount was fully disbursed in two tranches on March 1, 2013 and December 21, 2015, respectively.

According to the statement, the programme was designed to benefit the entire population of Nigeria in terms of extended access to more reliable supply of electricity at reduced rate.

It said, “The EPSERP will have a major positive impact on the private sector through the substantial reduction in the cost of doing business for all economic sectors, particularly in the formal and informal manufacturing and service activities which are seriously constrained by the power supply gaps.“

AfDB also said that the bank had also released one of its staff to support the government in its power sector reforms programme for 12 months on September 19, 2016

It said it was committed to assisting Nigeria to achieve the objectives of its reforms in the power sector in accordance with the priorities already approved by the authorities.

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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British International Investment and Ecobank Sierra Leone Sign $25 Million Risk Sharing Agreement to Boost Private Sector Growth

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British International Investment (BII), the UK’s development finance institution and impact investor, today announced a $25 million risk sharing facility with Ecobank Sierra Leone to boost private sector growth in high-impact sectors of the economy.

The risk sharing facility, which includes a comprehensive technical assistance programme, will support Ecobank to increase lending to ambitious businesses in a frontier market where economic growth is hampered by lack of capital and investment.

The private sector is crucial to Sierra Leone’s economy and mainly comprises small and medium-sized enterprises (SMEs) who provide employment for about 70 per cent of the population. However, they struggle to gain access to capital due to various factors including limited availability of suitable financial products, high collateral requirements, high interest rates and the prevalence of short-term loans.

The new facility will support local currency lending, demonstrating BII’s ability to act as the first mover in frontier markets and drive impact through pioneering risk navigation strategies. The investment will help Ecobank Sierra Leone to grow its loan book by increasing credit limits and extend lending tenors to up to five years, which are not otherwise available in the market. This is expected to boost business growth, create more jobs and increase private sector contribution to Sierra Leone’s economy.

The transaction marks a significant milestone as the first investment under the Africa Resilience Investment Accelerator (ARIA), which is a collaborative initiative launched by BII and co-funded with FMO, the Dutch entrepreneurial development bank, to boost investment in frontier markets such as Sierra Leone.

The Sierra Leone economy faces challenges including a depreciating currency driven by high inflation, a large trade deficit due to over-reliance on imports, and insufficient investment in infrastructure and services. BII’s investment aims to spur economic growth and development by targeting critical sectors including renewable energy, agriculture, agro-processing, infrastructure and manufacturing.

The announcement builds on a $50 million trade finance facility between BII and Ecobank in 2021, which helped the bank to deepen its reach across Africa and support supply chains in frontier markets such as Burkina Faso, Chad and Togo.

UK Minister for Development, Anneliese Dodds said: “I am delighted to see BII announce this new risk sharing facility with Ecobank Sierra Leone. This agreement will support local currency lending, bringing much-needed capital into sectors with a high development impact, thereby contributing to job creation and economic growth. This is yet another example of BII innovating to address risks and enable development in frontier markets.”

Samir Abhyankar, MD and Head of Financial Services, BII, commented: “The signing of this agreement with Ecobank Sierra Leone underscores BII’s pioneering role to lead investments in countries that are often overlooked by investors. The facility will be a game-changer for Sierra Leone, providing much-needed capital for ambitious local businesses to accelerate their growth, spur job creation and deepen impact. It’s an example of BII innovating and working with partners to help address pressing challenges where it matters the most.”

​Sebastian Ashong-Katai, Managing Director, Ecobank Sierra Leone, said: “We are delighted to have secured the support of British International Investment in boosting Ecobank’s vital lending capacity for Sierra Leone businesses who are the engine room for our country’s growth, economic development and employment. This further strengthens our intent to be the bank of choice for Sierra Leone’s businesses and leverages our delivery of world class products, services, solutions, borderless digital pan-African platform and business skills training which are designed to support them in further growing their businesses.”

Alex Kucharski, BII’s Head of West Africa for ARIA, added: “ARIA aims to unlock investment in Sierra Leone, a market full of potential. We are delighted to have enabled the investment by British International Investment into Ecobank Sierra Leone, which will bring much needed growth capital to underserved businesses in the country, showing that more investment is possible.”

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Nigeria Targets $10 Billion in Deep-Water Gas Investments with New Tax Incentives

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The Federal Government has perfected plans to attract $10 billion in new investments in deep-water gas exploration through tax breaks and other incentives.

In the new policy framework forwarded to the National Assembly to be passed into law, the Federal Executive Council (FEC) said about 67% of Nigeria’s offshore gas sector remains undeveloped.

However, the FEC believes that by providing tax credits for new investments in the sector, more global players can be lured to the untapped sector.

In a statement published by Olu Verheijen, special adviser to the president, the government also plans a gas-production allowance for greenfield developments in onshore and shallow-water locations.

“We intend to unlock between $5 billion to $10 billion of new investments in Nigeria in the near- to medium-term,” Verheijen said.

According to Verheijen, who also heads the Energy Office of the Presidency, once this is passed into, it would fast-track the development of natural gas, deepen gas usage for transportation and bolster energy security.

It was estimated that global businesses will be spending about $90 billion on deep-water oil and gas projects in coming years, this, Verheijen said is what the country is targeting.

“This is the pool of funds that our reforms are targeting,” she said.

The president has implemented a series of reforms to rejig the nation’s economy and set Nigeria on the right path. In a recent broadcast, the president claimed these reforms have attracted over $30 billion in foreign direct investment.

Despite the changes made to core policies, Nigerians are yet to see its results as earnings remained low and inflation rate remained at an all-time high while economic uncertainties in the face of chronic Naira depreciation have eroded the profitability of businesses.

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FG Secures $200m Afreximbank Investment For Creative Industry

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The African Export-Import Bank (Afreximbank) has announced plans to invest a sum of $200 million in the Nigerian creative industry.

The latest development was made known in New York during the “Destination 2030: Nigeria Everywhere” event held at the United Nations General Assembly (UNGA).

Speaking at the event which was organized by Nigeria’s Ministry of Arts, Culture, and the Creative Economy, the President and Chairman of Afreximbank, Professor Benedict Oramah, said that the funding was in line with the bank’s commitment to boost the nation’s creative industry.

He revealed that the latest move, aimed at building a foundation for sustainable economic growth will position the nation as a global leader in the global creative industry.

He said, “investing in the creative industries is about building a foundation for sustainable economic growth and positioning Africa as a global cultural leader.” 

 Speaking further, the Minister of Arts, Culture, and the Creative Economy, Hannatu Musawa, called for the support of investors, development partners, and global partners in the creation of 2 million jobs.

She described the event as a roadmap to transforming Nigeria into a global cultural powerhouse.

She stated, “Destination 2030: Nigeria Everywhere is our roadmap to transforming Nigeria into a global cultural powerhouse. To fully realize this vision, I urge investors, development partners, and global collaborators to join us in creating 2 million jobs and contributing $100 billion to the national GDP.” 

Investors King learned that after the main event of UNGA, Musawa engaged in talks with other investors to boost Nigeria’s cultural and creative industry.

She engaged in discussions with the UN Deputy Secretary-General Amina Mohammed, the Executive Director of the UN Office for Partnerships, U.S. State Department Under Secretary for Public Diplomacy, Lee Satterfield, and Faisal Alibrahim, Saudi Arabia’s Minister of Economy and Planning.

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