The World Bank has finally approved Nigeria’s request for a $3bn loan for the expansion of the transmission and distribution networks in the power sector.
The approval was given after a series of meetings held between the officials of the Federal Government led by the Minister of Finance Zainab Ahmed and officials of the World Bank.
Ahmed confirmed this while addressing journalists on Sunday about Nigeria’s participation at the annual meetings of the World Bank/International Monetary Fund in Washington DC.
She said the loan would be disbursed in four tranches of $750m each beginning from next year.
The loan, according to her would cover the funding gap as well as the current tariff which investors in the sector had described as very low compared to what is obtainable in other countries.
The minister said, “This financing will cover the gap between the current tariff and the actual cost of generating electricity.
“It will also enhance our ability to pay previous obligations in the sector that has crystallised so that investors in the sector can go on with expanding investments in the sector.”
She said some portion of the loan will be for the transmission network, adding that if the government can expand the facility to $4bn, then the additional $1bn will be used for the distribution network.
“The distribution sector will be at the backend when the other reforms have been carried out.
“It will be a loan to the distribution companies because they are owned by the private sector,” she added.