The African Development Bank (AfDB), yesterday approved $184.2 million loan to encourage private investments into Nigeria’s power sector. The bank explained that the facility is under the its Partial Risk Guarantee (PRG). It also approved $3.1 million loan to enhance capacity building in power generation and distribution to meet the country’s 40,000 megawatts (Mw) of electricity target by 2020. “The Board of Directors of the AfDB group approved an African Development Fund (ADF) Partial Risk Guarantee (PRG) programme of $184.2 million and an ADF loan of $3.1 million for capacity building to support the Nigerian power sector privatisation programme. “The Board’s decision will allow the AfDB to support the Nigerian Government’s efforts to reform the power sector and position the country for sustainable and inclusive growth,” the bank said in a statement. According to the bank, the PRG programme aims to increase the country’s electricity generation by catalysing private sector investment and commercial financing in the power sector. AfDB said: “The PRGs will mitigate the risk of the Nigeria Bulk Electricity Trading Plc (NBET), a Federal Government of Nigeria entity established to purchase electricity from independent power producers (IPPs). “It will also prevent the risk of not fulfilling NBET’s contractual obligations under its power purchase agreements with eligible IPPs. “This in turn will increase the comfort level of private sector financiers and commercial lenders investing in the Nigerian power sector privatisation programme.” According to the bank, available data from the Nigerian government shows that power outages cost the country about three per cent of its gross domestic product (GDP) annually. “It is anticipated that the IPPs eligible for coverage under the programme could generate additional 1,380 MW of power by 2016. “This will in turn increase Nigerians’ access to more reliable and affordable electricity from 41 per cent currently to 50 per cent by 2016,” the statement added. The bank explained that the potential impact of the programme would ensure effective and steady power supply, which is critical to the sustainability of the nation’s development path. Its Director for Energy, Environment and Climate Change, Alex Rugamba , noted that the Nigerian PRG programme was expected to improve productivity, economic activity and growth that would reduce poverty. “In the short to medium term, the project will yield an increase in the maximum electricity supply and consumption per capita,” he said. Rugama averred that Nigeria would need more private investment in the power sector to meet its development objective of ranking among the top 20 economies of the world by the year 2020. He said private sector investment was required in the supply chain for the country to meet her ambition generation targets.
Most Popular Stories
- Apple, HP, Intel May Take a Hit from Slowdown in Smartphone Sales Growth
- FDIC Files Lawsuit on Behalf of Banks Allegedly Hurt by Libor Scandal
- Some California Cities Seeking Water Independence
- Motley Crue's Nikki Sixx Marries Model Courtney Bingham
- Chinese e-Commerce Giant Alibaba Gears for IPO in U.S.
- Will Missing Malaysian Jet Prompt Aviation System Change?
- Jack Daniel's Resists Changes to Tenn. Whiskey Law