The World Bank has approved Nigeria’s request for a $3billion loan for the expansion of the transmission and distribution networks in the power sector. The minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed, noted that the country would get the approval of the first tranche of the $3 billion loans, which is being secured from the World Bank for the power sector by April 2020. The funding size of $3 billion will be split into four tranches of $750 million each.
“The $3 billion that Nigeria is trying to raise from the World Bank is for financing the power sector. This financing will include the gap between what is provided for in the current tariff and the cost of the businesses themselves. Some portion of the funding will be for the transmission network, and if Nigeria can expand the facility to $4 billion, the additional $1 billion is for the distribution network.
The minister emphasized the need for the sector to be more operationally efficient and the infrastructure investment restored to full production.
Nigeria made two sets of requests to the World Bank. The first is technical assistance from the bank to implementing agencies especially the Nigeria Electricity Regulatory Commission (NERC) on the review of the performance improvement plans of the distribution networks and technical assistance on business continuity regulation as well as technical support to the Ministry of Finance in the assessment of contingent liabilities in the power sector.
The ministry held meetings on securing a local currency bond to be raised from the international market. The UK authorities will support infrastructure financing through the possible issuance of Jollof Bonds. Deutsche Bank is also in the negotiation. The Jollof Bonds are issued offshore but denominated in the local currency. It protects the country, the issuer from exchange rate exposure.
Alhaji Usman Gur, the Managing Director and CEO of the Transmission Company of Nigeria (TCN), revealed that the federal government, in collaboration with international donor agencies, has set aside over $1.61 billion to ensure constant power supply in the country.
The project will be carried out under the Transmission Rehabilitation Expansion Programme. “We are rehabilitating and expanding to 20, 000 Mega Watts by 2022 across the country,” he said.
Gur, who is also the chairman of the West African Power Pool (WAPP) Committee Executive Board, stated that he led the TCN team to Kano to validate and look at the route that ran from the Kumbotso Transmission sub-station to Rimi Zakara.
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