Despite concerns over the country’s rising debt profile, the Nigerian government is seeking to obtain another fresh external loan of $247.3 million for the development of infrastructure.
The approval for the loan which was made by the Federal Executive Council (FEC) at its sitting in Abuja on Wednesday is coming just days after the International Monetary Fund (IMF) expressed concern over Nigeria’s current debt of ₦24.38 trillion.
Briefing State House correspondents after the meeting, the Minister of Finance, Mrs. Zainab Ahmed disclosed that $150 million would come from the African Development Bank to be spent specifically on rural electrification projects, $50 million from Africa Grow Together Fund for other electrification projects and $20 million from French Development Agency, to be loaned to the Lagos State government to build new roads and rehabilitate existing ones.
The Minister said another $27.3 Million IADE facility has been approved as part of the ‘North Core Dorsal Regional Transmission Project’, which is part of the West Africa Power Pool projects with a total loan requirement of $640 million.
Mrs. Ahmed explained that the projects would connect Nigeria, Niger, Benin Republic, Togo and Burkina Faso ‘with a high voltage 330 kilowatts transmission line to facilitate energy trade among the countries’.
“The project aligns with the strategy of the Federal Government on electrification of rural communities. The project has four components: First is a solar hybrid mini-grid for rural economic development; the second is productive appliances equipment for up-grid communities and the third is energy education while the fourth component is institutional capacity building.
“The impact of the project when fully implemented, about 500,000 people will be able to have access to electricity for about 105,000 households. The maximum power that will be generated will be 76.5 megawatts installed generating capacity part of which is 68,000 megawatts of solar.
“Eight universities will benefit from this scheme and about 20,000 small, micro, medium enterprises across different communities in the nation.
“The second approval is the North Core Dorsal Regional Transmission Project. This is a project that is part of the pipeline for the West Africa power pool priority projects. The intention is for the creation of a regional power pool in the region of West Africa.
“The pool project aims to connect Nigeria, Niger, Benin Republic, Togo, and Burkina Faso with a high voltage 330 kilowatts transmission line, to facilitate energy trade among participants.
“The project is in the total sum of $640m, out of which each of the four countries involved has a component. Nigeria has the smallest component in this pact, which is a total loan of $27.3 m IADE facility, a concessionary loan.
“This is a loan that the four countries are taking together; the other three countries have concluded theirs. So, this is one of the final stages for Nigeria to conclude its process,” she said.