President Umaru Yar’Adua has directed that N45 billion (about $300 million) loan received from the International Development Association (IDA), an arm of the World Bank be invested in the provision of key infrastructure in the power sector.
The President at last week’s Federal Executive Council (Fec) meeting said that the loan which is a special facility that has been dedicated for infrastructural development.
Professor Dora Akuyinli, minister of information and communications, while briefing State House Correspondents explained that the loan has been given on a concessionary basis with a service charge of .75 per cent per annum.
The receipt of the loan is expected to assist government achieve its target of delivering 6,000 mega watts of electricity throughout the country by December this year. The credit will be paid back over a period of 40 years and has a grace period of 10 years.
About N30 billion, which is $200 million of the loan will be committed for power transmission and distribution while N15 billion which is $100 million is for partial risk guarantee for gas supply to power plants across the country.
The Financing agreement of the loan is expected to be done by Dr. Mansur Muhtar, minister of finance.
Government has said that the utilisation of the loan facility would assist in the reform programmes of the administration particularly in the provision of technical assistance, and knowledge transfer.
This credit will be on-lent to Power Holding Company of Nigeria (PHCN) on the same terms and conditions offered by the IDA to the Federal Government.
The objectives of the projects are to improve that would be embarked upon through the loan facility government said will make availability and reliability of gas supply for power generation in public sector plants, and enhance PHCN’s power generation capacity.