As the pension fund hits N2.6 trillion, the debate as to whether to channel it into the power sector rages on, ROSEMARY ONUOHA, assesses the issues and the way forward.

Following the announcement by the National Pension Commission, PenCom, that the fund from the Contributory Pension Scheme, CPS, had hit N2.6 trillion; there were beehive of calls from many quarters for the fund to be invested into some developmental projects.

Accordingly, it was argued that the fund should not be left idle and be wasting away; instead it should be channeled into the power sector that is almost in comatose and is in dire need of revamping.

As the calls intensified, the federal government started thinking along that line.

Consequently, the Minister of Power, Prof. Bart Nnaji, announced sometime ago that the Federal Government is planning to use a fraction of the pension fund to build new power plants in order to boost electricity generation and supply in the country.

The Minister signed a $10bn agreement on behalf of the government with General Electric to build 10,000 megawatts power plants in the country. He said the government would tap a small percentage of the national pension fund to finance some of the power projects.

According to him, “What the pension money is meant for is investment, but you invest in more secure instrument and this project is one of them. Pension fund is a secure fund so you cannot play around with people’s retirement money, so it is very important that everyone understands that the plan is not to just take the money and invest in projects that are risky,” he added.

The minister explained further that infrastructure, including road and transmission lines, were guaranteed income earners “because charges accruing from them can fund the borrowed money from the pension fund.”

“There are not many projects that are more secure than the power plants; investment in this sector is constant because people must buy electricity, while government provides the guarantee,” Nnaji said.

However, as optimistic as the Minister of Power might sound, Pension Fund Operators, PenOp, do not share such optimism because, according to them, the idea is misplaced.

Managing Director/CEO of Aiico Pension Managers, Mr. Eguarekhide Longe, said that it is completely misplaced to keep on thinking that there is one N2.6 trillion that is idle that government can just take and build infrastructure. According to him, the cost of building power infrastructure is huge, as such; the N2.6trillion pension fund is only a drop in the ocean.