The Export-Import Bank of the US and the Nigerian ministry of power (MOP) have signed an agreement to increase the power output in Nigeria by ten-fold by 2020.

The memorandum of understanding (MOU) will secure up to US$1.5bn of US exports of goods and services to support power projects in Nigeria.

It is expected that the projects will be structured on an independent power producer basis (IPP), where the sale of power from the IPPs is supported by an adequate level of sovereign or other strong credit support.

Fred Hochberg, US Exim’s chairman and president, says: “US$1.5bn is just a start. We want to deploy this financing as quickly as possible to help meet President Goodluck Jonathan’s goals for growing the Nigerian economy by greatly expanding the availability of power in the country.”

“The bank’s board of directors will certainly consider additional financing if needed. We are also interested in financing US exports in support of Nigeria’s other infrastructure needs, which we understand may total over US$220bn between 2012 and 2016,” he adds.

Hochberg notes that the sale of US goods and services for expansion of the Nigerian electricity infrastructure will create or maintain many jobs in both the US and Nigeria.

Increased reliable power in Nigeria is widely accepted as central to the growth of the Nigerian economy.

Nigeria intends to increase its power output from the current four gigawatt level to 15-20 gigawatts by 2015, and 40 gigawatts by 2020.