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VENTURES AFRICA – Just days after the successful handover of Nigeria’s power sector assets to private investors, Zenith Bank Plc has said it will increase loans to the new owners.
According to Zenith Bank GMD Godwin Emefiele, “As we review the companies and we see viable propositions, yes we will expand loans to the industry.”
Last week, Nigeria officially handed over four power generation companies and ten distribution companies, formerly controlled by the now extinct Power Holding Company of Nigeria (PHCN), to new owners – who paid about N480 billion ($3 billion) cumulatively.
According to media reports, Zenith already invested an estimated N40 billion ($252,000) to some of the buyers, including Eko Electricity Distribution Company and Ikeja Electricity Distribution Company both in Nigeria’s economic hub, Lagos.
“Opportunities in power opened up and we took advantage of it,” Emefiele said.
If Zenith, Nigeria’s second largest lender by assets, continues in this trajectory, analysts say its loans to the sector may rise to 10 percent before next year, up from 4.3 percent in the third quarter and 1.3 percent at the end of June.
Emefiele while stating that the bank expects “steady growth” through the coming year, also noted that total loans could rise to 20 percent by 2014.