Banks have commenced collaborative effort to develop a framework to lend and finance power projects.
The effort, which largely focuses on aligning the Nigerian banking system to provide adequate financing to meet the peculiarities of the power sector, is being coordinated by the Bankers Committee with active participation of top management of all banks, the Central Bank of Nigeria (CBN) and other key stakeholders, and it is one of the key programme of the Committee for 2013.
The framework is the outcome of extensive discussions on the power sector at the recently concluded 4th annual retreat of the Bankers’ Committee. Participants at the retreat said the development of an industry-wide funding strategy was part of the outcomes of the discussions at the retreat.
Investigations indicate that the funding strategy and banks’ collective initiatives show that the funding strategy would provide the banking industry with a kind of master agreement or template that would foster best practices, remove inconsistency, ease access to funding and encourage regulator-operator understanding as banks move into the still-evolving power sector.
While individual bank may adapt the funding strategy to suit its internal structure and terms, the template would provide overall guidelines, structures, terms and concepts among others for the entire industry.
The CBN would sign on the banking industry funding strategy for power sector, which would give the template a quasi-regulatory status.