Project finance and energy infrastructure financing in a developing country (Nigerian energy sector)

Nasir Kolade

Research output: Contribution to conferencePaper

Abstract

An energy infrastructure-financing deficit is one of the fundamental challenges facing most developing countries (particularly Nigeria) at the moment. The energy infrastructure financing gap is addressed in this research by examining the use of project financing in financing energy assets in the country; it also addresses other sources of finance, such as government budget and corporate loans, using the Nigerian power (energy) sector as a case study. The analysis goes further, to examine the features of project financing, with emphasis on country risk and investment in the energy sector. Methodologically, the study uses the generalised method of moments (GMM, introduced by Pearson in 1894) to study the empirical relationship between energy infrastructure financing, project finance and other conventional sources of financing. Regression results suggest the energy project is positively related to project finance and other sources of finance, but inversely related to country risk and income from oil as percentage of GDP. All the variables mentioned earlier were significant statistically, except inflation which had a negative coefficient and was not statistically significant. The findings of this research indicate that project finance is a viable source of energy finance which can be part of the finance mix or as an alternative.
Original languageEnglish
Pages34-34
Number of pages1
Publication statusPublished - 6 Apr 2017
Event2nd Annual Research Conference of the Centre for African Research on Enterprise and Economic Development (CAREED) - University of the West of Scotland, Paisley, United Kingdom
Duration: 6 Apr 20177 Apr 2017

Conference

Conference2nd Annual Research Conference of the Centre for African Research on Enterprise and Economic Development (CAREED)
Abbreviated titleCAREED 2017
CountryUnited Kingdom
CityPaisley
Period6/04/177/04/17

    Fingerprint

Keywords

  • Energy infrastructures
  • Project financing
  • Nigeria
  • Developing countries
  • Agency theory and generalised method of moments (GMM) model

Cite this

Kolade, N. (2017). Project finance and energy infrastructure financing in a developing country (Nigerian energy sector). 34-34. Paper presented at 2nd Annual Research Conference of the Centre for African Research on Enterprise and Economic Development (CAREED), Paisley, United Kingdom.