The Co-Head of Africa, Practice, Hogan Lovells, Arun Velusami, has said an advantageous business milieu would encourage investors to invest in infrastructure construction in the nation.
He added that investments in the power sector would increase if the government made the economy attractive for investors to build and operate power plants.
He disclosed this during a press briefing in Lagos organised by the Hogan Lovells team to discuss the collaborative and growth opportunities within the Nigerian space.
Velusami explained that investors want certainty from the State and Federal Government about reliable and supportive policies towards their investments when building infrastructure.
He said, ‘For instance, if they are building a power plant, investors and lenders want to ensure that the government is standing behind the utility’s obligation.’
He added that the government plays a key role in attracting and maintaining infrastructural investments.
Velusami said, ‘If the government decides that the investments are a priority and they are willing to stand behind the utility’s obligation, this will attract investments in the long-term.
Some countries have attracted more investments and installed more power plant generating capacity, requiring less use of traditional power generating sets.
‘If the Nigerian government makes the economy attractive for investors to invest and build power plants, there is the likelihood that investments in the power sector would increase.
‘When international investors want to develop a power plant, they look for the most stable and attractive place to invest.
‘To a certain extent, Nigeria is competing with other countries to access international funding; it is not a direct competition because some funds and lenders focus on Nigeria, because throughout Africa, there are a number of countries they can invest in, and Nigeria needs to improve the investment climate to make itself an attractive investment destination to build and operate power plants.’