CBN Governor Lamido Sanusi

The Central Bank of Nigeria (CBN) said companies without strong financial back-up will not be allowed  to promote power projects in the country.

In addition, the apex bank stated that prospective power promoters must possess the ability to repay principal and interest on loans approved for power.

The CBN Governor,  Sanusi Lamido Sanusi, gave this indication in Lagos Thursday at a one-day conference organised by the National Association of Energy Correspondents.

The conference had the theme: “ Gas to Power: Prospects and Challenges.

Represented by the Deputy Governor, Financial System Stability, Dr Kingsley Chiedu Moghalu, Sanusi, said private or public sector sponsors (or a combination of both) that want to promote power projects must have enough cash flows to execute the projects

He  said  companies must meet two criteria before they will beallowed to go into power projects. They are project-based and impact-based eligibility criteria.

"The project-based criteria ensures that companies show ability to effectively deliver their product or service within the Nigerian electricity industry chain value and further demonstrate ability to pay interest to their bankers,” he stated.

He further said  power projects would be rated on their relative ability to make substantial impact on the electric power supply deficit in Nigeria.

“Under the programme, power projects’ promoters will need to demonstrate that they are capable of contributing significantly to the provision of electricity to end-users, as in a short term- frame as possible, and in a manner that is sustainable over a long term period, will be given priority”, he added.

He said measures are being taken to approve power projects that qualify for the facility in order to make the programme function effectively.

He stated that CBN, would in line with the best practice, appoint a committee to give final approval for the utilisation of the power facility, adding that the committee would consist relevant participants and stakeholders in the programme.

Sanusi said CBN has collaborated with other government agencies and development partners to improve infrastructure financing in the country, saying the World Bank, under the Nigeria Public Private Partnerships (PPP) Project, agreed in principle to provide a PPP  project finance facility of $315.5 million to the Federal Government.

The fund, he said, is to be channelled through the Infrastructure Concession and Regulatory Commission (ICRC).