On Thursday, a cash injection of US$90 million into the Nigerian power sector was announced in a statement by the U.S. Agency for International Development (USAID), GuarantCo and Standard Chartered.
This substantial loan will supply Nigeria’s Zenith Bank with new capital to inject into further developing the newly privatised power companies.
Standard Chartered said that ‘the funding will provide much-needed liquidity to the sector and support capital expenditures required by these companies to stem losses and generate revenue’.
‘This transaction exemplifies the strengths of the Power Africa model, engaging with our development partners and private sector actors to advance meaningful power projects at scale,” said USAID Administrator Rajiv Shah. “With this support, businesses and individuals will eventually have greater access to power, boosting opportunities for Nigerians and others across Sub-Saharan Africa’.
With Nigeria’s booming economy and population increase, local content has been considered throughout this process. This initiative will stimulate job creation in the installation and manufacturing phases.
Nigeria’s transition in 2013 from the public to private ownership of distribution and generation companies will be fully supported by the additional funds which are part of a collective effort with Government to continue to develop and maintain the sector.
Peter Sands, Group Chief Executive of Standard Chartered said that ‘reliable access to power is an absolute pre-condition to economic progress and inclusive growth, which unfortunately is not available in Nigeria and many parts of Africa today…
‘This agreement illustrates how the right partnerships and financing models can address the problem of power distribution in Nigeria. It also demonstrates our commitment to Power Africa, a catalyst that galvanises partnerships and facilitates the delivery of efficient electricity in sub-Saharan Africa’.
Dianne Rudo, member of GuarantCo’s Board of Directors was filled with excitement when commenting on the new partnership.
‘GuarantCo is delighted to partner with USAID to co-guarantee this transaction, which we believe will provide a template for how to crowd-in the private sector to enable financing of critical infrastructure in developing countries’, she said.