NSIA said the funding is derived from a $1 billion Eurobond which was successfully floated in 2013. A specially-managed federal government account has been created as a vehicle to manage it, NSIA said.
Of the $550 million, $200 million will be warehoused under the Nigeria Infrastructure Fund to finance gas to power investments in a co-investment partnership with domestic and foreign private players.
NSIA said the balance will go into a liquidity facility which the Nigerian Bulk Electricity Trading Company (NBET) will manage on behalf of the federal government “to boost investors’ confidence in the power sector reforms”.
NSIA added: “The objective is to generate catalytic funding for gas to power infrastructure, which will leverage on available funds to boost the development of the power sector and improve power supply.”
A December 2013 report by the US Energy Information Administration said that although Nigeria is the leading oil producer in Africa, production suffers from supply disruptions, “which have resulted in unplanned outages as high as 500,000 barrels per day”.
The International Monetary Fund has estimated that Nigeria’s oil and natural gas export revenue accounted for 96% of total export revenue in 2012.