By Etta Michael Bisong
Abuja
The Director-General of the Bureau of Public Enterprises (BPE), Mr. Benjamin Dikki has faulted claims of the imminent collapse of commercial banks in the country over their exposure to the power sector, while reassuring of the soundness of the nation’s banks.
Speaking at an all-parties meeting in Abuja at a presentation to the owners of the Power Holding Company of Nigeria (PHCN) Successor Companies (SCS) by the Africa Energy Team of the World Bank, Dikki noted that the fears by some of the eminent takeover of SCS due to the purported non servicing of loans or about the prospect of stress to the banks due to their exposure to SCS, were misplaced as the Successor Companies did not borrow directly from the banks for their own books. He further stated that, no assets of the SCS were pledged as collateral.
It should be noted that it was the acquiring companies that borrowed based on their cash flows and accounts. The SPA signed also requires that the consent of the BPE is obtained before the Core Investors can borrow.
“The banks lent to the Core Investors based on their capability to pay. The investors are supposed to have made adequate provisions to take care of their obligations to their financiers from the outset. They knew that they were not going to make profit immediately on takeover of the SCS. Their financiers also were aware of this”, he stressed.
During the presentation entitled “Reform of the power sector in Latin American countries in the 1990s”, aimed at sharing experiences of the power sector privatization in these countries, Mr. Pedro Antmann reminded the investors that their primary focus should be to provide adequate and efficient power supply to Nigerian consumers.
He said that there were unusually challenges at the initial stages of the privatisation exercise but that with determination and the right strategy, it would be surmounted.