The Nation Newspaper

Tag: Banks

  • Banks’ loans to oil, gas, power firms hit N4tr

    •Financial institutions may go to capital market for funds

    Nigerian banks are battling imminent liquidity crisis over huge exposure and non-performing loans to oil and gas and power sector, which is presently in excess of N4 trillion, The Nation has learnt.

    The situation is making it difficult for operators in the oil and gas and power to secure loans for operations.

    Head, Energy Research, Ecobank Group Mr. Dolapo Oni told The Nation banks could not release funds to oil and gas industries because there was no fund to release unless they go and raise money in the capital market.

    He stated that this year, a lot of banks will go to the market to raise capital “because if they don’t raise capital, there will be nothing to lend”.

    Oni said: “Banks don’t have funds to release unless they go the capital market to raise capital. If they don’t raise capital, there is nothing to lend. A lot of banks are exposed to 30-40 per cent of their loan books to oil and gas.  The implication of this is that if oil price continues to remain low, most of those banks will start recording losses on those particular assets.

    “Currently, we have about 12.8 per cent of all loans that are non-performing in banking industry, and the bulk of that is from the power, oil and gas sector.

    “So, it is pushing the banking industry into a region that they are approaching a crisis in terms of non-performing loans. Also, the banks have an issue of foreign exchange (forex) in their hands. Most of the loans are in dollars and these companies that took loans are not getting dollars. So, the banks have dollar issues too.

    “Besides, those banks borrowed from their foreign bankers to lend to the oil and gas companies and so, they are finding it difficult to pay their own foreign bankers too. I think for the banks to continue their duties, they need to raise capital or there will be no funds to lend to the oil and gas this year. Next year, things might be a lot easier and we will see banks lending to oil and gas and power sector.

    “As at Q3 (third quarter) last year, banks’ exposure to oil and gas and power sector was N4 trillion but as the value of Naira depreciates, the amount of those loans rise because the loans were in dollars. Also, by the time the Central Bank of Nigeria (CBN) comes out with its 2016 report, banks’ exposure to the energy sector may be much higher.”

    Oni added that the CBN was not providing enough dollars to the banks, but noted that the apex bank “is having meetings with the banks to see how (they) banks will source more dollars to pay their foreign bankers and other clients”.

    “But unfortunately, CBN insists it doesn’t have such dollars,” the banker said.

    To resolve the forex problem, he said the “Federal Government needs to deregulate the forex market fully so that people can come into the market”.

  • Banks to contribute 5% of PAT to fund import substitution

    Banks to contribute 5% of PAT to fund import substitution

    •Cashless policy rollout in 30 states coming

    Deposit Money banks have agreed to contribe five per cent of their Profit After Tax (PAT) to a pool of funds to fund eligible bankable projects meant for exports and to drive the economy.

    Based on the industry’s last three years profit and loss account, the Central Bank of Nigeria (CBN) and members of the Bankers’ Committee have estimated that about N24.9 billion almost N25 billion will be contributed annually by the banks which on the average, is the expected yield of the five per cent PAT of the banks in the last three years.

    Addressing reporters at the end of the first  committee’s meeting for this year, Director Banking Supervision of the CBN, Mr Ahmed Abdullahi,  said the fund would be kept in the CBN “and the scheme will be controlled by members of the bankers committee itself, there will be a project review committee that will review submissions by entrepreneurs that require funding and that project review committee would make the recommendation to the the board of trustees of the bankers committee.”

    Abdullahi stated that “the scheme is such that each bank will have an equity holding in the scheme based on its annual contribution from its profit.”

    He added that “banks have submitted their 2016 statement of account and they are to be published not later than April of 2017 so we’re going to start the scheme in 2017 using 2016 financials of banks. The idea is to help the federal government’s drive to diversify the economy, any scheme or industry that is going to be export driven will benefit, similarly any industry that is going to provide import substitution.”

    The decision to introduce this new initiative, he explained is because “a number of SMEs and agric businesses do not have enough credit to drive business activities so the Bankers’ Committee felt that they should lend a helping hand to the economy in providing credit to those businesses that are important to the real sector, those businesses that are important in diversifying the economy away from oil.”

    A project he said will be financed for a maximum of 10 years it can be earlier, the gestation period is what matters, businesses do not have long term funding this can allow funding up to a period of 10 years.

    Corroborating what the CBN official said, Managing Director of FSDH, Mrs Hamda Ambah,  noted that “this is an equity fund not a loan, the banks will come and provide equity that will be there for up to 10 years and the banks will also take an equity and look at getting equity type returns before they exit in 10 years. No interest rates, just a share in the profit, the banks collectively will have an ownership stake and benefit if the investment is successful and exit after 10 years. It will be like we are coming to take shares in your company, it’s like partnership.”

     

  • CBN queries five banks for manipulating forex rates

    CBN queries five banks for manipulating forex rates

    Five commercial banks have been queried for manipulating foreign exchange (forex) transaction rates, The Nation learnt at the weekend.

    The Central Bank of Nigeria (CBN) detected the rate manipulations following the mandatory rendition of forex returns and compliance with anti-money laundering regulations. The identities of the banks were not clear as at press time.

    But a CBN statement yesterday admitted that some of the queried lenders manipulated forex rates. Others attributed the rate discrepancies to ‘formatting errors’.

    Although the statement was silent on the number of the affected banks, industry sources said five lenders were involved and may face sanctions.

    Round-tripping a serious financial crime, has become more rampant after the CBN introduced the flexible forex policy which devalued the naira by over 40 per cent against the dollar. The policy shift created a huge gap between the official and parallel market rates.

    About 20 to 25 per cent of the volume of forex traded in the country is from autonomous sources, usually diverted into the parallel market through round-tripping. The naira was on Friday trading at N306 to dollar in the official market and N498 to the dollar in the parallel market, raising the temptation of rate manipulation among banks desperately looking for free funds to boost their profits.

    The CBN statement said: “The commercial banks involved in providing inaccurate data has since been issued queries accordingly. Some have returned a response indicating that some of the figures were related to formatting errors which do not affect the true rates of the affected transactions.”

    The CBN said it neither allocates foreign exchange nor does it deal directly with bank customers adding that it also does not fix forex rates for transactions by individuals or companies.

    “In line with our principle of transparency, we directed Deposit Money Banks (DMBs) to forward to us evidence of forex sale to end users and to advertise same in national dailies. Since the introduction of the new forex policy in 2016, we have published, monthly, the evidence of sale from DMBs, as received from the banks and without any alteration by us in the spirit of transparency. We have recently observed, however, that some DMBs forwarded inaccurate data, which were erroneously published and gave a wrong impression of disparate rates,” the statement said.

    “As the constitutionally authorised industry regulator mandated to manage the forex market, maintain external reserves and to safeguard the international value of the legal tender currency, we wish to state unequivocally that the CBN has a duty to perform and would not indulge in acts capable of discrediting the forex market,” it added.

    The CBN said the forex sale under the new policy was most transparent and not intended to benefit any individual or corporate body in anyway. “While we appreciate the concerns of stakeholders, we urge all concerned to verify information on matters relating to the bank and use our available channels to lodge their complaints,” it said.

    There have been several allegations against the CBN on irregularities in the rates at which forex were obtained by some individuals and companies from banks under the new 60:40 foreign exchange policy, which prioritises forex sales to manufacturers, agriculture, plant and machinery and critical raw materials, among others.

    The CBN’s report on forex utilisation showed last week that it disbursed $1.07 billion to 4,328 manufacturers, power and other real sector operators for the procurement of raw materials, plants and machinery.

    Playing prominently in the funding are FirstBank, Zenith Bank, Access Bank, Unity Bank, Union Bank, Wema Bank, and Sterling Bank.

    Others are Diamond Bank, GTBank, Fidelity Bank, Jaiz Bank and FBN Merchant Bank.

    The report, which was for November, listed some of the beneficiaries as Dana Motors, Dangote Industries, Eat N Go Limited, Flour Mills Nigeria, GX Foods Limited and PZ Cussons.

    Others are Indorama Eleme Petrochemicals Limited, Fidson Healthcare Limited, Okomu Oil Palm, MTN Nigeria Communications, Nestle Nigeria Plc, Nigerian Breweries Plc and Nigerian Bottling Company Limited among others.

    The forex utilisation report was meant to promote transparency and accountability on the side of the lenders which act as a link between the regulator and the forex users.

    The CBN said providing forex to the manufacturers and other key players in the economy was meant to enable it keep its promise to strengthen the real sector of the economy by ensuring that 60 per cent of available forex is used to procure industrial inputs, such as raw materials, machine spare-parts, telecom equipment, plastic raw materials, agricultural machines and pre-payment meters, amongst others.

    The CBN has also expressed its commitment to ensuring that manufacturers of goods for which Nigeria does not enjoy comparative advantage are able to get LCs to import materials for their businesses.

    The exercise, the CBN insists, will provide a new lease of life in the manufacturing sub-sector, and also boost industrial output and employment.

    The regulator said it will continue to support and facilitate hitch-free procurement of industrial inputs to sustain production in the manufacturing sector. The gesture, the CBN said, buttresses its commitment to rejuvenate and sustain industrial activities and keeping jobs.

  • Banks’ bad loans hit N856.9b, says report

    Banks’ bad loans hit N856.9b, says report

    Banks’ assets have depreciated in the last two years, with provisions for Non Performing Loans (NPLs) hitting N856.9 billion, a financial market report has said.
    The report by the investment and research firm Afrinvest West Africa Plc was released yesterday. It said provisioning for the NPLs, which rose 3.1 times from N280.4 billion in December 2014 to N856.9 billion last August, trimmed qualifying capital for mid to small-sized banks. The high concentration of forex denominated loans has nominally increased risk weighted assets following pressure on forex rate, it said.
    The report titled: “The Nigerian Economy and Financial Market 2016 Review and 2017 Outlook: Reform or be Relegated”, attributed the rise in NPL to foreign exchange (forex) crisis, low oil prices, which fell below trend production volumes and tight monetary policy, which plunged the economy into recession while the asset quality of banks has sharply deteriorated.
    These, the report said, were at the heart of a slow-burning solvency and liquidity crisis in the financial sector.
    It said the NPL ratio increased from 2.9 per cent in 2014 to 11.7 per cent as of June 2016, with the forecast it could rise to 12.1 per cent as at December 2016. The pressured portfolios of the banks include upstream oil and gas, general commerce, manufacturing and power sectors, which account for 48.1 per cent of total industry loan book.
    The report also said FBN Holdings, Diamond Bank Plc, Heritage Bank Limited, First City Monument Bank Limited, Union Bank of Nigeria Plc, Unity Bank of Nigeria Plc and Skye Bank Plc would either require fresh capital or aggressively capitalise their earnings to stay within prudential limits in the next one year.
    The Capital Adequacy Ratio (CAR) for banks that operate in Nigeria alone is 10 per cent, and is 15 per cent for lenders with offshore subsidiaries and 16 per cent for Systematically Important Banks (SIBs).
    Central Bank of Nigeria (CBN) spokesman Isaac Okorafor said he was yet to receive the report and would not comment. A spokesman of one of the banks said his lender would not source any fresh capital, but would rather capitalize its earnings. He pleaded not to be named.
    The report said: “In our estimation, seven banks- FBN Holdings, Diamond Bank of Nigeria Plc, Heritage Bank Limited, Unity Bank Plc, First City Monument Bank Limited, Skye Bank Plc – would need to raise capital or aggressively capitalise earnings to stay within prudential limits in the next one year.”
    According to the report, access to capital market for debt and equity financing remains tight due to the weak macroeconomic backdrop and investor sentiment even as profitability going forward will also be pressured as banks would be required to adopt International Financial Reporting Standards (IFRS) in reporting impairment charges from 2018.
    It said the new accounting policy is much stiffer in that it forces early recognition of impairments. “We forecast NPL ratio to stay in double-digit in 2017 as the macro pressures persist whilst the delayed but certain adjustment of the currency in 2017 will further increase provisioning cost,” it said.
    It said there were suggestions that regulators were considering another Asset Management Corporation of Nigeria (AMCON)-type bailout to acquire stressed assets, “but we doubt the feasibility of this, given the stretched finances of the federal government, already encumbered balance sheet of the CBN and the public backlash another bailout will generate”.
    The report said the impact of the above factors had put pressure on the CAR of banks across all Tiers with four lenders currently below or at threshold of regulatory limit.
    “To create a soft landing for banks and stabilise the financial system, the Central Bank of Nigeria (CBN) recently issued a regulatory guideline to allow a one-off write-off of already provisioned loans before the mandated one-year period. The CBN also took over a Tier-2 lender, Skye Bank, which fell four percentage points below the mandated CAR limit and below liquidity ratio guidelines.”

    “The management of the bank was changed while the CBN injected N100 billion of liquidity to prevent a run on the bank. We also understand that a sizeable portion of the bank’s oil and gas loans have been restructured and the quality of the portfolio should significantly improve in subsequent months as oil prices rally,” the report said.
    Continuing, it said despite the above situation, it did not believe that risk to financial system stability has materially reduced on account of the level of provisioning, both for restructured and un-restructured assets, is not adequate with Loan Loss Reserve/Non-Performing Loan ratio currently below 50 per cent and at a six-year low.
    The report said Nigeria’s business cycle would be highly dependent on the ability of policy makers to deliver incremental oil output in 2017, restore macroeconomic stability by rebuilding confidence in monetary policy and the administrative side of the forex market structure as well as showing commitments to structural reforms.
    Afrinvest believes that activities in the Nigerian economy in 2017 will be broadly dependent on the Federal Government’s resolve to implement tough but necessary structural reforms in order to recalibrate the economy towards a path of recovery and rebuild confidence in monetary policy.
    Said the report: “We note that oil prices which had hitherto overwhelmingly driven Nigeria’s business cycle will play a reduced role in the medium term. Despite the recent OPEC/Non-OPEC deal to cut production volumes, the balance of oil resources (between conventional low cost-drillers in OPEC countries and increasingly resilient and efficient shale producers) as well as diversification into clean energy in advanced countries suggests that structurally, the era of more than $80.00/b oil is over.”

    It said the short to medium term outlook would be highly dependent on the ability of policy makers to deliver incremental oil output in 2017 while also reviewing the current structure of the currency market. “The 2017 budget, which is broadly optimistic, given current macroeconomic realities, will require the focused commitment of both the Executive and Legislative arms of government in order to get passed into law so that timely implementation can begin to achieve the objective of stimulating economic recovery through increased infrastructure spending,” Afrinvest said.

  • CBN directs banks, MfBs, DFIs to disburse N220b agric funds

    CBN directs banks, MfBs, DFIs to disburse N220b agric funds

    • Anchor Borrowers’ Programme guidelines out 

    The Central Bank of Nigeria (CBN) yesterday appointed Deposit Money Banks (DMBs), Microfinance Banks (MfBs) and Development Finance Institutions (DFIs) to disburse N220 billion targeted at the Anchor Borrowers’ Programme (ABP).

    The apex bank also released guidelines for the implementation of ABP which it said was established in line with its developmental function.

    According to the CBN, the ABP fund shall be provided from the N220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF). Loan amount for each farmer shall be arrived at from the economics of production agreed with stakeholders.

    “Interest rate under the ABP shall be guided by the rate on the N220 billion MSMEDF, which is currently at nine per cent per annum (all inclusive, pre and post disbursement). The Participating Financial Institutions (PFIs) shall access at two per cent from the CBN and lend at a maximum of nine per cent per annum,” it said.

    The guidelines also said banks that fail to apply the nine per cent interest charge on the loans shall reverse the excess fees/interest charged and will be issued a warning letter to the and outright ban from participating under other CBN Interventions after two infractions.

    “The tenor of loans under the ABP shall be the gestation period of the identified commodities while repayment loans granted to the farmers shall be repaid with the harvested produce that shall be mandatorily delivered to the Anchor at designated collection center in line with the provisions of the agreement signed. The produce to be delivered must cover the loan principal and interest,” it added.

    In a circular, the CBN said the ABP, which was launched by President Muhammadu Buhari in November 2015 was intended to create a linkage between anchor companies involved in the processing and small holder farmers (SHFs) of the required key agricultural commodities.

    It said the programme thrust of tABP was the provision of farm inputs in kind and cash (for farm labour) to small holder farmers to boost production of these commodities, stabilize inputs supply to agro processors and address the country’s negative balance of payments on food.

    It said at harvest, the SHF supply his/her produce to the Agro-processor- the Anchor who pays the cash equivalent to the farmer’s account.

    The ABP, the CBN added, evolved from the consultations with stakeholders comprising Federal Ministry of Agriculture & Rural Development, state governors, millers of agricultural produce, and smallholder farmers to boost agricultural production and non-oil exports in the face of unpredictable crude oil prices and its resultant effect on the revenue profile of Nigeria.

    “The broad objective of the ABP is to create economic linkage between smallholder farmers and reputable large-scale processors with a view to increasing agricultural output and significantly improving capacity utilisation of processors.

    “Other objectives include:  Increase banks’ financing to the agricultural sector. It was also meant to reduce agricultural commodity importation and conserve external reserves  Increase capacity utilisation of agricultural firms and create new generation of farmers/entrepreneurs,” the CBN said.

  • Banks witness low customer traffic as work resumes

    Commercial banks operating in Aba, the commercial hub of Abia State yesterday witnessed low turnout of customers as work resumed across the state after Christmas and New Year holidays.

    Our correspondent who visited some of the commercial banks within the city reported that most banking halls and Automated Teller Machines (ATM) points were without the usual rush of customers unlike what was obtainable during the Yuletide.

    Some of the bank workers who spoke anonymously said the situation has been the case over the years, stressing that they are expecting having more customers by next week when people that traveled to their various villages must have returned and commercial activities expected to have picked up.

    “You know that the New Year festivity was celebrated on Sunday and many people that traveled to their various villages are yet to return back to Aba. It has been the situation over the years, but we hope that business and banking activities will pick up by next week when people must have returned and markets in Aba reopened for business activities. Aba is a business town and when people travel to their villages to celebrate with their loved ones,  banks, markets, government and corporate offices are usually dull,” he said.

    Some of the customers including Mr. Francis Okoroafor who spoke to our correspondent said  they were at the various banks to carry out minor transactions which are very urgent to them, pending when businesses improved.

    He said: “I am at the bank to pay up my debt with the company that supplies goods to me because they are taking their stock at the moment and will resume work officially by the end of this month (January) or first week of next month (February). Ariaria where I have my shops just opened for business today and from the experience over the years, we are expecting that our customers will start coming into the market by next week when people who traveled home must have come back.”

    It was not a different situation at government offices in Aba North and South Local Council headquarters as workers were yet to report to work.

  • Promos:Lottery Commission forces banks to redeem prizes

    As banks try to grow their depositors’ base and help promote a saving culture through lotteries, the National Lottery Commission has intervened in some bank promos to get some banks to redeem their promises to participants.

    Though the  commission boss did not mention any bank by name he urged all banks engaging in promos or planning to engage in one in the future “to keep to their words.”

    This disclosure was made by the Director-General of the National Lottery Commission Adolphous Ekpe at the first Quarterly prize presentation of the “Get Alert in Millions Savings Promo” of Fidelity bank in Abuja.

    Ekpe stated that the commission was set up to ensure that all those who participate in lotteries particularly promos benefit whether they win or not. According to him, “promo operators are mandated to contribute to a trust fund for a good course.”

    The lottery commission Director-General noted that lottery in Nigeria “is an economic activity that can be done by any organisation and I appeal to Nigerians interest in lotteries to participate only in approved lotteries.”

    Earlier in his address, the Deputy Managing Director of Fidelity Bank, Mr. Mohammed Balarabe, said the Quarterly prize presentation of the “Get Alert in Millions Savings Promo” was the sixth promo the bank was involved  in in the last nine years and each promo come with a distinct theme.

    Under the “Get Alert in Millions Savings Promo”, Balarabe stated that “there will be 300 winners for this promo that will last till May 2017.”

    Balarabe noted that the presence of the National Lottery Commission to monitor the bank’s promos has given Fidelity bank promos credibility and integrity.

  • CBN, NDIC detect ailing banks six months ahead

    CBN, NDIC detect ailing banks six months ahead

    Joint bank examination team from the Central Bank of  Nigeria (CBN)  and  Nigeria Deposit Insurance Corporation (NDIC), has the ability to detect ailing banks at least six months before it becomes public knowledge.

    NDIC Director, Bank Examination Department, Adedapo Adeleke, said both regulators have been conducting Joint Risk Based Examination of banks since 2009.

    Adeleke, who spoke  at the 2016 conference for financial journalists in Kaduna,  said  banks are as healthy as the economic environment in which they operate, saying that no lender can withstand a run from their customers.

    He stressed the need to always safeguard sensitive information on the health of banks.

    Adeleke insisted that no bank can withstand protracted macro-economic stress without some impact, adding that strong risk management practices can only delay the transmission of stress.

    He said: “There is no system that is immune to crisis. Banks are businesses and fail all over the world despite banking supervision. If you run a bank badly, it will fail. Banks are like hospitals, people will die. Supervision keeps the banks alert to ensure they do not take excessive risks”.

    According to him, it was wrong to assume that one bank would be in crisis simply because its competitor is having liquidity problems.

    “Don’t say that because Bank ‘A’ is in crisis, another is also in crisis. Banks differ in terms of balance sheet and other factors,” he added.

    The NDIC Director who spoke on the theme: ‘Refocusing Banking Supervision in Nigeria in an Era of Economic Recession’ said that the challenges being faced by the economy was due to drastic drop in prices of crude oil.

    He said that the financial sector remained a major driver of economic growth and development. It occupies a central position in the economic development process of any economy it assists in promoting accelerated economic growth through the process of financial intermediation.

    “For that reasons, strategic elements of Supervisory Approaches and Tools are deliberately designed to be forward looking to reduce the impact of unfavourable economic cycle on the health of individual bank and the financial system,” he said.

  • ‘Digital financial services to cut banks’ cost by 90%’

    Digital financial services have the potential to cut the cost of providing financial services by 80 to 90 per cent and create three million new jobs by 2025, the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele has said.

    Speaking yesterday at the 2016 BusinessDay Financial Inclusion Summit held in Lagos, said that financial inclusion has evolved as a key topic on the global development agenda over the last decade.

    He explained that its importance has grown substantially over the last years, which is reflected in the growing number of academic studies showing its positive effects.

    Emefiele said that financial inclusion is required to enhance incomes, investment and well being at the household level. It is also critical for economic growth and financial stability at the macroeconomic level.

    He said that these gains prompted Nigeria to launch its National Financial Inclusion Strategy in October 2012 with the overall target of reducing the adult financial exclusion rate from 46.3 percent in 2010 to 20 percent by 2020. This means that by 2020, we expect that eight out of every 10 adult Nigerians should make use of at least one financial product (formal or informal).

    “Within this strategy, distinct targets were stipulated for specific elements of financial inclusion including access to electronic payments, savings, credits, insurance and pension products, among others. For instance, 70 per cent of the adult population is designated to utilize electronic payments platforms comprising cards, Automated Teller Machines, mobile money/banking and Point of Sale (PoS) channels by 2020,” he said.

    He explained that based on the bi-annual survey report routinely conducted by the Enhancing Financial Innovation and Access (EFINA), the adult financial exclusion rate had dropped from 46.3 per cent in 2010 to 39.5 percent by 2014. This is a very complimentary and favorable development.

    “However, in order to achieve the defined target for 2020, the extant rate still needs to be halved. This requires stronger and systemic efforts by all stakeholders. This is where digital financial services, the focus of today’s summit, become germane,” he said.

    “Digital financial services refer to financial services, such as payments, savings, loan or insurance products, which are provided through electronic platforms, such as mobile phones, the internet, or electronic cards. Digital financial services can promote financial inclusion, because they are capable of dismantling the existing barriers to financial inclusion. One key barrier to financial inclusion, as defined in Nigeria’s National Financial Inclusion Strategy, is the remoteness of access to financial services,” he added.

  • Banks stall govt’s efforts on renewables

    The Federal Government’s efforts at boosting renewable energy in the country may have been stalled as banks vow not to provide facilities to the operators, The Nation has learnt.

    It was gathered that banks are turning down offers for credit from companies that are providing renewable energies such as solar, biomass and wind, because of the fact that they are not strong enough financially to meet their debt obligations.

    A Chief Executive Officer of one of the new generation banks, who spoke on condition of anonymity, said banks have concluded plans not to extend credits to operators in the renewable energy sub-sector of the nation’s electricity industry, due to their weak position.

    He said: “Renewable energy operators require far smaller facility of let says between N50million and N70million at most. When you give them such loans at interest rate of between 22 per cent and 24 per cent, they find it difficult to repay the loans.”

    According to him, renewable energies operators are not high-net worth people that can be trusted with huge credit.

    Also, a special assistant on renewable energy to the former Minister of Power, Prof Chinedu Nebo, DrHurbertOkorodu,said it is difficult getting money to finance the operation of the power sector.

    He said operators in the renewable energy sub-sector are hard hit, since they could not garner enough financial supports for operation.

    “From my interactions with many financial institutions in Nigeria, firms that are offering renewable energy services are handicapped financially. They do not have enough money at their disposal, because banks do not give them facility,’’ he said.

    He said the bane of the nation’s electricity problem is funding, stressing that the sector is starved of funds by successive administrations in the country.

    The Federal Government advocated for a concept known as energy mix, in order to boost generation and supply of electricity in Nigeria. Through energy mix, the government is exploring opportunities in the Off-grid and On-grid system to improve power supply and the economy.