Lagos, Nigeria, August 3, 2010—A
roundtable of public and private sector infrastructure experts convened
by IFC, a member of the World Bank Group, is recommending rapid action
by the Nigerian government to help ensure that private capital can play
a larger role in solving Nigeria’s infrastructure bottlenecks, especially
IFC convened the fourth quarterly session of its infrastructure roundtable
series during the final week of July. The roundtable session focused
on encouraging medium-scale power generation projects serving a core group
of industrial customers. Such examples can help meet urgent needs by Nigerian
consumers for lower-cost energy. These projects could also demonstrate
the effectiveness of private initiatives and encourage further policy changes
leading to a larger scale, longer-term transformation of the sector.
Jyrki Koskelo, IFC VP for Global Industries, said, “The long-term success
of the Central Bank of Nigeria’s banking sector reforms is dependent on
government rapidly encouraging market demand for capital in large, commercially
viable projects, especially in infrastructure. To improve the competitiveness
of Nigerian small and medium enterprises, power and transport infrastructure
have to be improved and transformed sooner rather than later.”
IFC challenged prospective private financiers and project sponsors at the
roundtable to pool and commit their risk capital for early-stage project
development that will create well-structured projects capable of attracting
further equity and debt financing. Koskelo committed IFC to reciprocate
through financial and advisory support of such efforts.
Solomon Adegbie-Quaynor, IFC Country Manager, Nigeria, said, “Over 90
percent of Nigeria’s industrial customers self-generate base load power
on a relatively small scale and with poor efficiency. We should encourage
medium-sized gas-fueled efficient power supply with regulatory flexibility
to distribute within and around industrial clusters, as well as to sell
to the grid. Such changes would ensure that the productive sectors of industry,
including SMEs, would receive reliable and affordable power supply that
leads to increased employment and higher incomes for Nigerians.”
IFC, a member of the World Bank Group, is the largest global development
institution focused on the private sector in developing countries. We create
opportunity for people to escape poverty and improve their lives. We do
so by providing financing to help businesses employ more people and supply
essential services, by mobilizing capital from others, and by delivering
advisory services to ensure sustainable development. In a time of global
economic uncertainty, our new investments climbed to a record $18 billion
in fiscal 2010. For more information, visit www.ifc.org.
IFC Infrastructure Roundtable, Nigeria
Fourth Quarterly Session
The IFC Infrastructure Roundtable in Nigeria made the following key recommendations
to help resolve infrastructure bottlenecks at its meeting in Lagos in July
-Expediting development and financing of medium-size power plants with
agreements from non-regulated industrial customers to offtake the power,
with excess sold into neighboring clusters and the grid, with appropriate
-Developing a project development funding
facility to help encourage and incubate projects capable of attracting
bank and other private financing.
-Supporting private equity infrastructure
funds given its scarcity relative to the needs of the sector.
-Providing credit enhancements from
development financing institutions to mitigate non-commercial risks, such
as regulatory uncertainty.
-Improving the regulatory environment,
including regulator independence, transparency on tariff setting and on-going
adjustments, and streamlining licensing process.
-Investment to upgrade transmission
-Providing incentives for expedited
investments in gas supply and transportation.
About the IFC Infrastructure Roundtable
The IFC Infrastructure Roundtable in Nigeria is a forum that brings together
private and public sector players to debate and share ideas on how private
capital and project management expertise can be mobilized to help address
the infrastructure deficiencies in Nigeria. The roundtable is committed
to offering ideas that can sustainable improve the competitiveness of the
Nigerian economy. Participants at the IFC infrastructure roundtable
include infrastructure project developers, private equity funds, state
government, regional development finance institutions (DFIs), and international
and local banks. IFC’s strategy in Nigeria strategically prioritizes:
infrastructure, especially power which is the largest single constraint
to private sector development and the competitiveness of the Nigerian economy;
and, agribusiness, which is the largest contributor to GDP (40 percent)
and largest employer (65 percent) in Nigeria, especially of the rural population.