Nigeriaâ?s decision-making Federal Executive Council (FEC) Wednesday gave the government the go-ahead to obtain a US$300 million credit from the International Development Association (IDA), the concessional lending arm of the World Bank, to finance power transmission and distribution infrastructure for the nationâ?s power sector.
The US$300 million credit is in addition to the US$5.38 billion earmarked for expenditure under the National Independent Power Project (NIPP) by the Nigerian government, out of which US$3.38 billion has been spent so far.
The IDA facility is repayable over a period of 40 years with 10 years period of grace, and attracts a service charge of 0.75 per cent per annum on the actual amount drawn from the credit and a commitment charge of 0.5 per cent per annum on undisbursed balance of the credit.
Nigerian government officials said US$200 million of the credit facility would be devoted to the electricity and gas improvement projects, while the remaining US$100 million would serve as risk guarantee on the project.
Information and Communications Minister Dora Akunyili said the objectives of the Nigerian electricity and gas improvement project â?are to improve availability and reliability of gas supply for power generation in public sector power plants and enhance Power Holding Company of Nigeria (PHCNâ?s) power generation capacity.â?
She said the fund would be â?utilised for funding of critical investments in the power sector, particularly to strengthen electricity transmission and distribution”.
In a related development, FEC also awarded contracts for the complete overhauling and commissioning of ‘intake band screen system’ at the Egbin power plant in Lagos, described by the Minister as the ”most significant contributor of electric power to the national grid”
Akunyili also announced the award of contracts for transmission sub-station projects at Oba and Nnewi, both in South-east Anambra State; the construction of 2x60MVA 132/33 KV substation / 2×132 KV line bays at Ideato (South-east Imo State) and 2×132 KV line bays extension at Okigwe (Imo State) substation.