JAIZ Bank, Nigeria’s first non-interest bank, is currently devising a strategy, leveraging on its relationship with the Islamic Development Bank (IDB), which will enable it invest and help facilitate financing of the nation’s power sector, BusinessDay can reveal.
Representatives of IDB are expected in Abuja “hopefully in the coming week” for advanced talks, Idris Salihu, head, corporate communications for JAIZ, tells BusinessDay. “They will be coming over and then we will sit down and look at all the options. As I speak with you, discussions are going on”, he said.
$3.4 billion is currently being sort by government to bridge the yawning infrastructure gap in the electricity transmission sub-sector, considered to be the weakest link in the power value chain. The transmission network is one area of the power network that was not privatised but remains in government control though under a management contract arrangement with Canadian company, Manitoba.
Last month, minister of power, Chinedu Nebo, suggested that Nigerian banks, generally considered as not competitive enough to provide this much needed funding, should consider forming consortiums, noting that it would be a pity if local banks do not get involved in investing in the sector.
Salihu admits that JAIZ, as an entity is on its own not able to finance such “large ticket transactions,” so leveraging on this relationship with IDB is crucial to being able to invest in the power sector. Notably, IDB sits on the board of JAIZ Bank.
“The power sector is actually a very huge investment. If we are going to play in the power sector we can only leverage on our relationship with the Islamic Development Bank (IDB) based in Jedda, in Saudi Arabia. We have proposals on ground that we are reviewing and that is the way we are going to be able to finance, to participate in the power sector”, he explains.
JAIZ Bank is currently trying to expand its capacity by upgrading its licence to a national operating one. “By this we want to be in every state capital of the federation and that would entail building up our capital base to about N10 billion. We are almost there, we are working on it, so hopefully before the end of the year”, the bank official said.