• Saturday, May 18, 2024
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FG activates $500m AfDB loan for intervention in power sector

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The Federal Government has activated a $500 million African Development Bank (AfDB) loan aimed solely for intervention in the power sector.

The loan, to be released in $100 million tranches, was activated by the inauguration of a technical monitoring committee yesterday at the ministry of power headquarters in Abuja. Notably, the induction of this committee was mandated by the AfDB as one of the pre-conditions for drawing on this budget support loan.

In the meantime, the Transmission Company of Nigeria (TCN) has been given priority and asked to access the initial $100 million.

Currently, the nation’s transmission grid remains a weak link in the power value chain, with a wheeling capacity of about 4,800 MW. By year end, National Independent Power Projects (NIPPs) are expected to provide additional generation capacity of about 2,200 MW. With government objective to achieve 10,000 MW in 2014 and 20,000 MW in 2016, the urgent need to expand the transmission capability to evacuate the projected additions becomes all the more imminent.

According to the government, about $3.4 billion will be needed to upgrade the transmission

network to the standard that it would evacuate the expected generation capacity coming on stream.

“We have been challenged by the problem of not being able to evacuate power beyond 4,500 MW. If we have appropriate funding in the next one year, we will be able to double our transmission capacity. The technical committee is critical, as it is required by AfDB to access the loan,” said Nebo, represented by the ministry’s permanent secretary, Godknows Igali.

The committee is constituted by representatives from the Federal Ministry of Finance, ministry of power, Bureau of Public Enterprise (BPE) and TCN.

The minister, while challenging the members of the committee, said that the Federal Government expects much from them, as their efforts would help fast-track the disbursement of this initial $500 million loan and the possibility of accessing even more funds.

Haruna Mohammed, chairman of the Committee and ministry of finance director for international economic relations department, speaking on-behalf of the group, observed that the members were all well informed on the problems in the sector and promised that all of TCN’s projects through this loan, would be properly tracked and assessed, to ensure successful execution.

“We need to leverage on execution of these initial projects to be able to access other available funding, moving forward,” Mohammed said.