By KAYODE TOKEDE,
Loans by eight commercial banks in the country to the power sector increased by 22 per cent or N107 billion from N483 billion in 2015 to N590 billion in 2016 highlighting efforts by the banks to support operators in the real sector of the economy, investigation by LEADERSHIP has revealed.
These banks include: United Bank for Africa, Zenith Bank Plc, Diamond Bank Plc, First City Monument Bank group Plc (FCMB), Access Bank Plc, Sterling Bank Plc, Fidelity Bank Plc and Union Bank of Nigeria Plc.
The National Bureau of Statistics (NBS) banking sector credit report for the private sector had stated that credit to the power and energy sectors in 2016 hits N1.67 trillion of which its involved credits to Independent Power Producer (IPP) and Power construction companies.
A breakdown of the figures, however, showed that while Zenith Bank Plc exposure to the power sector increased to N108 billion in 2016 from N55.75 billion, Diamond Bank’s exposure to the sector also showed the bank gave out N111.6 billion as credit to the power sector, 69 per cent increase over N65.99 billion recorded the previous year.
Similarly, while FCMB credit to the power sector was N43.95 billion in 2016, up from N27 billion the previous year; Sterling Bank investment in the sector recorded N24 billion in 2016, an increase of 61.2 per cent from N14.9 billion in 2015 and Access Bank credit to power recorded N21.4 billion in 2016 from N15.96 billion.
Others are Fidelity Bank credit to power sector that hits N87.8 billion, 28 per cent increase over N68 billion in 2015; Union Bank of Nigeria N36 billion exposure to power sector in 2016, 18.9 per cent increase over N30.6 billion in 2015 while United Bank for Africa credit to the sector dropped by 23 per cent to N159 billion as against N204.5 billion recorded in 2015.
Finance experts had said the nation’s economy entered recession in 2016, due to dwindling global oil prices and inadequate power supply, among others. According to LEADERSHIP findings, banks intervention has facilitated recovery of 1,193Mega Watt of generating capacity through the overhaul of 10 turbines.
It has also helped in the acquisition of 414,000 meters and 70,310 number of 500KVA transformers by the Discos; rehabilitation of 332km of 11Kilo Volts lines and 130kilometers of 0.45Kilo Volts lines; procurement and construction of 34 new distribution substations; and acquisition of one mobile injection sub-station.
However, the International Monetary Fund (IMF) projected Nigeria’s output growth to increase to 0.8 and 2.3 per cent in 2017 and 2018, respectively. The Central Bank of Nigeria (CBN) thus continued to intervene in the power sector with the Nigerian Electricity Market Stabilisation Facility (NEMSF).
The apex regulating body in 2016 disbursed N11.41 billion to three power projects. According to CBN, cumulative disbursement from inception stood at N272.61 billion for 59 projects, comprising 43 power and 16 airline projects in 2016.
“A total of 1,758 MW of electricity generation and the construction of 120-kilometre natural gas pipeline were financed under the scheme at end-December 2016. During the review period, the sum of N8.11 billion was released to 6 Generating Companies (Gencos). Total disbursement of funds from inception stood at N114.74 billion to 29 eligible electricity market participants. The sum of N4.11 billion was repaid by eight Distribution Companies (Discos) bringing the cumulative total repayments to N6.26 billion.” the CBN had explained.