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| Minister for Power, Works and Housing, Mr. Babatunde Fashola |
The Federal Government is seeking a loan of $5bn from the
World Bank Group to boost power availability in Nigeria, investigation has
shown.
The World Bank had in April stated that a powerful
delegation from Nigeria was in Washington DC to discuss assistance for the
nation’s power sector, but did not disclose the details of the talks.
However, investigation by our correspondent showed that the
Federal Government was actually seeking a loan of $5bn to be channelled into
the power sector in order to boost electricity availability in the country.
Present at the April 25, 2017 meeting in Washington DC were
the Minister for Power, Works and Housing, Mr. Babatunde Fashola; Minister of
Finance, Mrs. Kemi Adeosun; Chairman, Senate Committee on Power, Steel and
Metallurgy, Senator Enyinnaya Abaribe; and Chairman, House of Representatives
Committee on Power, Mr. Dan Asuquo.
At the end of the meeting, the World Bank Group had said
that it would deploy a full range of instruments to mobilise investments to
resolve Nigeria’s energy crisis.
The Director of Operations at the Multilateral Investment
Guarantee Agency, an arm of the World Bank Group, Sarvesh Suri, said a full
range of instruments would be deployed to help the government mobilise
investments directly from the private sector and through private sector
guarantees.
According to the Debt Management Office, out of Nigeria’s
external debt of $13.81bn as of March 31, 2017, the World Bank Group had a
portfolio of $6.93bn.
This means that the World Bank holds more than 50 per cent
of the country’s external debt portfolio.
Should the loan being sought by the Federal Government be
approved, Nigeria’s indebtedness to the World Bank would rise to about $11bn,
excluding other smaller loans that have been approved after the March 31
accounting date.
The bank had in 2014 announced $1.19bn guarantees meant to
lift the nation’s electricity sector.
The Board of Executive Directors of three arms of the World
Bank approved the package of loans and guarantees supporting a series of energy
projects to help boost independent power generation and ease crippling energy
shortages in Nigeria.
It said the projects were critical elements of the World
Bank Group Energy Business Plan for Nigeria.
The World Bank, International Finance Corporation and
Multilateral Investment Guarantee Agency’s World Bank partial risk guarantees
approved included $245m for the 459 Megawatt Azura Edo Power Plant near Benin
City, Edo State; and $150m for the 533MW Qua Iboe plant in Ibeno, Akwa Ibom
State. Both plants are gas-fired.
The Boards of the IFC and MIGA approved loans and hedging
instruments worth $135m and guarantees of up to $659m for the Azura Edo
project.
The IBRD guarantees included forward-looking mitigation and
risk-sharing arrangements designed to augment the country’s power sector
reforms, while building market confidence and setting industry benchmarks.
The IFC investment and MIGA’s guarantee for the Azura Edo
power plant were to support a trailblazing project at the centre of Nigeria’s
power sector programme, while setting a replicable model for future power
projects.
The bank said addressing energy needs in Nigeria required
investment from the public and private sectors, adding that working with the
World Bank Group could help catalyse significant private investment in an
environment that best assured successful delivery of increased power supply.
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