U.S. EX-IM BANK, NIGERIAN MINISTRY OF POWER SIGN AGREEMENT FOR UP TO $1.5 BILLION TO INCREASE POWER OUTPUT IN NIGERIA
Ex-Im Financing Will Help Create, Maintain Jobs in Both U.S. and Nigeria
October 19, 2011
ABUJA, NIGERIA - The Export-Import Bank of the United States (Ex-Im Bank) and the Nigerian Ministry of Power (MOP) today (Oct. 19) signed a Memorandum of Understanding (MOU) aimed at securing up to $1.5 billion of U.S. exports of goods and services directed at a ten-fold increase in power output in Nigeria by 2020. "$1.5 billion is just a start. We want to deploy this financing as quickly as possible to help meet President Goodluck Jonathan's goals for growing the Nigerian economy by greatly expanding the availability of power in the country. The bank's board of directors will certainly consider additional financing if needed," said Fred P. Hochberg, Ex-Im Bank chairman and president. "We are also interested in financing U.S. exports in support of Nigeria's other infrastructure needs, which we understand may total over $220 billion between 2012 and 2016," he said.
Hochberg noted that the sale of U.S. goods and services for expansion of the Nigerian electricity infrastructure will create or maintain many jobs in both the United States and Nigeria. Increased, reliable power in Nigeria is widely accepted as central to the growth of the Nigerian economy.
Nigeria intends to increase power output from the current four gigawatt level to 15-20 gigawatts by 2015, and 40 gigawatts by 2020.
The Bank and the MOP intend to establish a framework to support U.S. exports to power projects in Nigeria. They expect that the projects would be structured on an Independent Power Producer basis (IPP), where the sale of power from the IPPs is supported by an adequate level of sovereign or other strong credit support.
Transactions under the power sector framework would be approved by Ex-Im Bank on a case-by-case basis, in compliance with Ex-Im's credit, environmental and other policies and procedures, The agreement was signed in Abuja, the Nigerian capital, by Chairman Hochberg and Minister of Power Bart Nnaji during the Chairman's business development mission to the country this week.
Nigeria is one of nine countries in the world that Ex-Im Bank has identified as offering U.S. companies the greatest opportunities for sales. The other countries are South Africa, Turkey, India, Indonesia, Vietnam, Brazil, Mexico, and Colombia. All have growing economies and significant infrastructure needs.
About Ex-Im Bank:
Ex-Im Bank is an independent federal agency that helps create and maintain U.S. jobs by filling gaps in private export financing at no cost to American taxpayers. The Bank provides a variety of financing mechanisms, including working capital guarantees, export- credit insurance and financing to help foreign buyers purchase U.S. goods and services.