Deposit Money Banks’ (DMBs) commitment of over- N3trillion in the energy sub-sector is discouraging the financial institutions from further financing of energy and power projects.
Energy Market and Rates Consultants Country Director, Mrs. Rahila Thomas, said this while enumerating the challenges confronting the power sector in Lagos, adding that, the huge exposure of banks to the power sector has made it difficult for operators to access funds. She said revenues generated from the sector were substantially lower than expected as a result of various factors affecting the sector.
She also said at the time of takeover, exchange rate was N197 to a dollar but today it is over N350. Therefore, the cost of buying equipment and gas to power the plants have increased while price of power has not changed appropriately. She added that all the agreements the investors entered with the government on handover of the power firms, have not been fulfilled, adding that the companies have been operating at a loss for the past two and half years.