The Federal Government has sealed a $10 billion (about N1.56trillion) agreement with General Electric (GE) towards the construction of power plants that generate a total of 10,000 megawatts (MW) of electricity in the country.
Minister of Power, Barth Nnaji, who signed the Memorandum of Understanding (MoU) on behalf of the Federal government on Sunday in London, said the agreement, under which GE would be an equity participant, provides for the construction of a “series of power plants” to be located at various locations across the country.
“In the past, GE only supplied the equipment, but now, they will be investing 10 to 15 per cent as equity for every single project,” Mr. Nnaji said. “The government will match them in such investments, while the private sector will bring the balance.”
The minister told News Agency of Nigeria (NAN) that government would tap a small percentage of the National Pension Fund NPF) to finance some of the power projects.
“What the pension money is meant for is investment. But you invest in more secure instrument and this project is one of them,’’ Mr. Nnaji said. “Pension Fund is a secure fund, so nobody can play around with the people’s retirement money. So, it is very important that everyone understands that the plan is not to just take the money and invest in project that are risky.”
Mr. Nnaji explained further that infrastructure, including road tolls and transmission lines, were guaranteed income earners, “because charges that accrue from them can fund the borrowed money from the pension fund”.
“There are not many projects that are more secured than the power plants. Investments in this sector are constant, because people must buy electricity, while government provides the guarantee,’’ the minister said.
Nigeria had signed a similar MoU with GE in 2009, but the minister insisted that the new arrangement was more detailed in specifics.