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By NBF News
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Nigeria needs to invest close to US$3.5 billion per annum in the energy sector over the next 10 years in order to achieve stable power supply, Managing Director of First Bank Nigeria Plc, Bisi Onasanya, has said.

He disclosed this in a paper titled 'Gas and Power: Ensuring a Supportive Financial Framework'' presented at the 2010 Nigerian Gas Association (NGA) conference held in Abuja recently.

He said the government over the past decade has pursued a comprehensive reform agenda in the power sector.

According to him with the adoption of the National Electric Power Policy in 2001/2002 and the promulgation in 2005 of the Electric Power Sector Reform Act, the old public sector monopoly was unbundled, new entities were carved out for generation, transmission  and distribution and a regulator put in place for the industry.

''Essentially, these initiatives represent a clear shift in the ownership, control, and regulation of the sector with government incentivizing the private sector for partnership.

He, however, said the goals of the gas sector to expand production by increasing the participation of independent power producers in the industry may not be achieved unless the private sector intervened .

He said power and gas producers will need to make additional investments in their respective sectors.

'We have seen significant investment in the gas sector over the years, including the Nigeria Liquefied Natural Gas Limited (NLNG), OK-LNG plant at Olokola, Ondo State, Brass River LNG plant, the West African Gas Pipeline (WAGP), and the Trans-Saharan Gas project''.

Onasanya, who said Nigerian banks may not have all the muscle to provide necessary support for energy projects, adding that they  would have to access foreign sources of funds in order to scale up their activities in these areas.

He explained that collaboration under defined roles and risk assessment frameworks is possible with international financial institutions, especially the World Bank and its soft loan arm, the International Financial Corporation (IFC), the African Development Bank (AfDB), Africa Finance Corporation (AFC) and other key international providers of development finance.

According to him,  following the road map unveiled by President Goodluck  Jonathan,  opportunities are emerging for the provision of funding to prospective investors through either syndication or structured finance.

He said the extension of the CBN's special credit facilities to investment in these sectors is a needed boost.

He disclosed that his bank has over the years funded some energy projects in the country that has made input into national development.

These, according to him, include,participating in the syndicated loan of US$205 million for the United Cement Company Limited (UNICEM), Calabar, Cross River State, signing a US$240 million financing deal with MainOne Cable Company, in conjunction with Skye Bank and African Finance Corporation (AFC) for the construction of a sub-sea cable to deliver a 1.92 terabits per second capacity bandwidth, providing  loan syndicates of US$1.3 billion to Vmobile Nigeria, the largest dollar-denominated facility in the history of the country US$185 million for NITEL's acquisition of a GSM Licence; US$72 million for expansion of NITEL's switching facility andUS$600 million to Dangote Industries Limited among others.