Global finance body, World Bank has agreed to give Nigeria a $3 billion loan for expansion of transmission and distribution facilities of the power sector.
Minister of Finance and National Planning, Zainab Ahmed disclosed the development while addressing journalists on the sidelines of the annual meetings of the International Monetary Fund (IMF) and World Bank.
According to the Minister, the fund will bridge the gap between the current tariff and cost of power generation.
“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.
According to her, the loan will be released in four tranches of $750 million each and there is room for the loan to be expanded to $4 billion.
“Some portion of the loan will be for the transmission network and if we are able to expand to $4 billion then the extra $1 billion will be 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 said a team from Nigeria will visit the World Bank in April 2020 to get approval for the release of the first tranche of the loan.