The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, has said that the Federal Government is optimistic of securing $3 billion World Bank loan to supplement resources for funding power sector projects in the country.
Ahmed, who gave the hint on Sunday during a media briefing about Nigerian delegation’s participation during the just-concluded World Bank/International Monetary Fund Annual Meetings in Washington, DC, said that the loan would be used to plug funding gaps and tariff differentials, which had been a source of complaints by private investors in the sector.
In addition, the minister said that some chunk of the fund would be committed to transmission investments in the electricity value chain.
The minister explained that Nigeria’s loan proposal intended for the power sector funding was at a range of $1.5 billion to $4 billion but expressed the hope that about $3 billion may be granted by the Breton Woods institution for the project.
Ahmed clarified: “At the end of the day, it looks like we will be looking at a funding size of $3 billion that will be provided in four tranches of $750 million each.
“Our plan was that the team would have been able to go to the World Bank for the approval of the first tranche in April 2019.”
“If the government is able to expand the facility to $4 billion, the additional $1 billion would be used for the distribution segment. It will help us to exit the subsidy that is now inherent in the power sector.
“It is supposed to be to reform the sector and to restore the distribution business side of the sector, especially to put it on a stronger footing. This is to ensure that they are freed up enough to be able to go out and raise finances to invest in expanding the distribution networks’’, Ahmed added.
