• Says Nigerian banks can’t finance $3.4b loan
The Federal Government will spend proceeds from the privatisation of the Power Holding Company of Nigeria (PHCN) to offset the severance package of the power sector disengaged workers, the Minister of Power, Prof. Chinedu Nebo, has said.
Nebo, who spoke yesterday in Abuja, explained that the proceeds will be employed to bridge the gap between the N384billion approved for the payment of the workers’ severance package and the N45billion allocated for the same purpose in this year’s budget.
He explained that with regards to the electricity workers, the government has earmarked N384billion for paying off these staff, but added that only N45billion has been provided for in the budget.
He said the proceeds of the sale of these companies will fund the rest, adding that after the payment of the deficit, there will be little or nothing left from the privatisation proceeds.
The minister stated that Nigerian banks were free to compete in the financing of the $3.4billion loan required to fix the transmission grid, adding that the fund was required for the 776MVA super grid.
He was however sceptical on the possibility of Nigerian banks’ preparedness to provide the level of capitalisation required in the power sector, since in his opinion, they were used to short term loan and high interest rates.
He revealed that the foreign banks involved in the financing are offering very low interest rates and long term credit facilities.
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