By EBUN SESSOU
The World Bank has announced plans to contribute towards addressing the huge infrastructure deficit in Nigeria, with the provision of N32 billion ($200 million) as seed fund to set up a Financial Intermediary Loan (FIL) scheme under the Public Private Partnership (PPP) initiative.
Mr. Joe Ohiani, Head, Legal and Governance, Infrastructure Concession Regulatory Commission (ICRC) who disclosed this at the inaugural ESQ Project Finance Summit, held in Lagos, stated that some other development finance organisations have also agreed to contribute to the scheme.
He added that eligible participating financial intermediaries, particularly commercial banks with Africa Finance Corporation (AFC) as the lead, will lend to qualifying private sector partners in a Public Private Partnership (PPP) project at the financial intermediaries’ risk.
He, however, emphasised that the objective of the scheme is to provide long term funding for infrastructure development in the country, stressing that in selecting eligible projects, priority would be given to public investment programmes which are in accordance with the national policy on PPP and captured in the Federal Government Medium Term Sector Strategies and the National Infrastructure Plan of the Vision 20:2020.
Presenting a paper titled, “Governmental Promotion of Infrastructure Development,” Ohiani bemoaned the deplorable state of infrastructure in the continent as revealed by a recent report of the World Economic Forum which showed that, though annual investment in infrastructure in Africa doubled from $17 billion to $35 billion between 2001 and 2009, the overall infrastructure spending needs for sub-Saharan Africa is estimated at $93 billion annually over the next decade.
He noted that the annual infrastructure investment gap of $31 billion offers huge opportunities for private sector finance in infrastructure developments in Africa. “Governments in Africa are taking active steps towards addressing the state of infrastructure in the region,” he added.
Speaking earlier, Mr. Lere Fashola, CEO, ESQ Seminars, organisers of the summit, said that the aim of summit was to take a critical review of different near-term or completed projects across Africa, recent legal and legislative developments in different countries as well as the challenges of the bidding process in the electrical and power sectors, and governmental promotion of infrastructure development projects.
On the state of infrastructure in the country, Ohiani regretted that the Federal Government has been the sole financier of infrastructure projects and has often taken responsibility for construction, operations and maintenance, stating that the national fiscal budget was the principal source of financing infrastructure development.