The Central Bank of Nigeria (CBN), Power and Airline Intervention Fund or PAIF has successfully financed about 1,415MW of power generation in Nigeria since inception, with 980MW of this capacity being entirely new power supply or Greenfield plants to bridge the country’s severe deficit.
The $2 billion policy intervention facility has become the largest source of low-cost, local currency financing for power and aviation projects in Nigeria, according to analysts.
The CBN initially provided N300 billion facility for investment in debentures to be issued by the Bank of Industry (BOI) in accordance with Section 31 of the CBN Act 2007, for investment in power and aviation projects.
The Power Intervention funds were channeled through the BOI for on-lending to the Deposit Money Banks at a maximum interest rate of 1.0 per cent for disbursement at concessionary interest rate of not more than 7.0 per cent and a tenor of 10 to 15 years.
The African Finance Corporation (AFC) are technical advisers to the fund.
Despite the recent surge in generating capacity Nigeria still has a deficit in generation of nearly 7,000 Megawatts and Distribution (15,000 MW) and Transmission (13,000 MW) to achieve reliable power.
The CBN has been keen to expand the development interventions of the bank in the real sector of the economy.