By Yinka Kolawole
The N300 billion Power and Aviation Intervention Fund, PAIF, set aside by the Central Bank of Nigeria, CBN, to help  sustain private sector investment in the two sectors, is set for disbursement as the Bank of Industry, BoI, managers of the Fund, yesterday in Lagos, hosted a Technical Session for participating banks.

The technical session, according to the Executive Director, BoI, Mohammed Alkali, was organised to bring together all the stakeholders in the management of the fund in order to resolve all the grey areas in the guidelines.

The CBN announced the establishment of the Fund last month, as part of the initial N500 billion intervention fund announced earlier in April in a bid to catalyse financing of the real sector of the Nigerian economy.

The apex bank, accordingly, appointed BoI as the Managing Agent vested with the responsibility for the day-to-day administration of the Fund, while the African Finance Corporation (AFC) serves as the Technical Adviser.

Power sector projects can access a loan of up to 70 per cent of their total cost from the fund, while those in the Aviation sector can benefit to the tune of 40 per cent of their total existing loans, all at a maximum of 7 per cent all inclusive interest rate.

Speaking at the event, CBN’s Director, Development Finance Department, Mr. Joe Alegieuno, who noted that the fund is ready for disbursement by the apex bank, said that the intervention fund is expected to fast-track the development of the Power and aviation sectors of the economy.

“The role of CBN is providing the fund and specify what is to be used for and also engage in some monitoring supervision to ensure that desired objectives are met. We also set the limits as well as the interest to be charged. While the participating banks are to take the application on behalf of the customers and ensure that the projects are viable.

So they apply on behalf of the customers from the Bank of Industry. So, the banks bear the risks effectively.

“The likely benefit basically is that if the infrastructure is working well, then automatically it means there will be growth in the real sector. And if we are able to grow the real sector, that is growing the economy of the nation. And you know that one of the areas we are particularly interested in is the growth of the SMEs, which will positively impacted,” he stated.

Alegieuno warned that banks are not expected to sit on the fund or trade with it, adding that as soon as they receive the fund from BoI, they are expected to immediately on-lend to the project operators.

Deputy CEO/Chief Investment Officer, AFC, also speaking at the event, noted: “CBN has recognised that one of the lacking things in the Nigerian economy is getting long-term money into the productive sector of the economy.

So what it is has done with this initiative is to make available, in this particular case, N300 billion for the Power and Aviation sectors to try and get long-term money into those particular sectors that will benefit both sectors for the people.”

A representative of one of the banks in attendance, Dr. Tochukwu Nwachukwu, Head, Economic Development & Special Interventions, Access Bank Plc, asserted that the CBN initiative is a brilliant idea. He however noted that they needed some verifications and clarifications on some issues but they commit themselves.