FG to Utilize Infrastructure Bond Instrument to Finance Projects
In its bid to fast track road/bridge projects development nationwide, the Federal Government is to utilize Infrastructure Bond Investment from finance institutions and investors.
This was disclosed by the Minister of Power, Works and Housing, Babatunde Fashola while receiving Institutional Investors, inclusive of HSBC, China group 3 and 4 led by the Managing Director of Stanbic IBTC, Dr. Damola Sogunle, in his office on Tuesday, February 27, 2018.
Fashola explained that to finance road/bridge projects through Tax Relief and Islamic banking “Sukuk” cannot be enough to provide infrastructure development in Nigeria, adding that Infrastructure Bond Instrument will complement government efforts at providing the needed critical infrastructure to end users.
He stated that the inability of Nigerian government to appropriately in the past informed the present administration, channeling its energy towards economic recovery through agriculture.
In the same vein, the Minister expressed the need for a reset in the housing sector in the country. He emphasized that the “financial establishment must stand as the vanguard of the reset” by borrowing a leaf from countries that have successfully utilized similar investment practice, such as United Kingdom.
Fashola disclosed that the Pilot Home for the National Housing Programme of the present administration has taken off in 33 States of the federation. This, he said is made up of one to three bedrooms model which are expected to be valued accordingly, considering the standard and infrastructure.
The Minister, further disclosed that the Federal Government who is currently holding 40% equity in the power sector, is of the opinion that privatization is logical, arguing that it has been successful in the media, banking, aviation sectors amongst others.
According to him, the Ministry will optimize on existing capacity even as government has approved distribution extension programme in power. He added that investors in the power sector should be able to bring in value by looking at areas where investment is actually required; saying that supply of meters will improve service delivery and end user confidence in the DISCOs.
Earlier, the Managing Director of Stanbic IBTC, Dr. Damola Sogunle, explained that the investors were interested in financing projects that will impact positively in infrastructure. He added that the visit will enable the investor in Nigeria have information and good understanding of what is happening in the Ministry and the country at large in order to make proper investment decision.
The meeting was attended by Minister of State 1, Federal Ministry of Power, Works and Housing, Hon. Mustapha Baba Shehuri, the Permanent Secretary, (Power Sector), Engr. Lious Edozien, Director of Finance, (Works and Housing Sector), Alhaji Ibrahim Tumsa and other Directors in the Ministry.