The Minister of Finance, Mrs. Zainab Ahmed, yesterday said the Federal Government’s request for a $3 billion World Bank loan to finance the power sector was at the verge of being granted.
The News Agency of Nigeria (NAN) quoted her making the disclosure at a media briefing on activities of the Nigerian delegation to the just-concluded World Bank/International Monetary Fund Annual Meetings in Washington.
“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.”
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.
Meanwhile, President Muhammadu Buhari will today depart Abuja to attend a three-day Russia-Africa Summit in Sochi, Russia.
The event, which holds from October 23 to 25, is focusing on exploring and expanding opportunities in security, trade and investment as well as science and technology and gas production.
During the trip, the president will meet with his Russian counterpart, Vladimir Putin, to strengthen economic ties.
A statement yesterday by his Senior Special Assistant on Media and Publicity, Garba Shehu, said the Nigerian leader would return to the country immediately after the summit.