The federal government has made fresh request for a $3 billion World Bank loan to finance the power sector.
The minister of finance, budget and national planning, Mrs. Zainab Ahmed disclosed this at a media briefing on activities of the Nigerian delegation to the World Bank/International Monetary Fund (IMF) Annual Meetings which held in Washington recently.
Ahmed who stated that the request was on the verge of being granted said: “We put a request for financing of the power sector at a range of $1.5 billion to $4 billion.
“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,” she said.
The minister explained that the loan would be used to plug funding gaps and tariff differentials, which she said, private investors in the sector had always complained about.
Ahmed said a portion of the money would go into the transmission segment of the electricity value chain.
“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.’’
The minister stated further that the funds would also address the shortfall between the current tariff and the actual cost of generating electricity.
With NAN report