Nigeria to invest $2.7 billion loan in power infrastructure

The Federal Government is spending nothing less than $2.7 billion on power infrastructure, Minister of Finance, Budget and National Planning, Dr. Zainab Ahmed, has said.

The fund, which the country is currently awaiting consensus for it to become operational, is part of a $3.387 billion loan agreement expected to execute 10 projects across the country.

In the power sector, the projects include, World Bank funded Nigeria Electrification Project (Off-Grid), $350 million, North Core Interconnection Power Transmission Line (Regional Project under West African Power Pool), $32.3 million, Nigeria Electricity Transmission and Access Project, $486 million, Nigeria Electrification Project, $200 million, Nigeria Transmission and Expansion Programme, $210 million, to be funded by the African Development Bank, Abuja Power Feeding Transmission Scheme, $170 million, Northern Corridor Transmission Line, $245 million to be funded by the French Development Bank.

Zainab, who had disclosed this at a town hall meeting in Abuja, said there are a lot of projects ongoing which were funded by an external loan, the projects, according to her, include the $984.32 million Zungeru Hydropower Plant.

Privatised in 2013, Nigeria had designed an ambitious plan to deliver 40, 000 megawatts of electricity by now but total generation capacity remained at 12,000WM, of that capacity, the actual generation is less than 6,00MW. Only about 4,000MW is wheeled to end-users due to transmission and distribution bottlenecks.

In about six years, subsidies and interventions in the sector apart from the current $2.7 billion loan stands at about ₦1.3 trillion amid policy inconsistency, weak regulations, lack of transparency, poor data, metering challenges and others.

The borrowing for the Nigeria Electrification Project (NEP) is expected to provide electricity access to households, micro, small and medium enterprises in off grid communities across the country through renewable power sources.

The North Core project is a 330-kV transmission line from Birnin Kebbi (Nigeria) to Ouagadougou (Burkina Faso) through Zabori (Niger) and Niamey (Niger) with T-off to Malanville (Benin). The estimated investment costs are around $550 million for the 853 km of lines and five associated substations.

While Nigeria has stranded power with demand coming from neighbouring countries, expectations are that the transmission line would enable the country to export electricity to other countries.

With the Nigeria Electricity Transmission and Access Project, the country aims to support the rehabilitation and upgrade of Nigeria’s electricity transmission substations and lines, to increase power transmission network and allow distribution companies to improve supply to consumers. The Nigeria Transmission and Expansion Programme also targets the same goals.

The $200m Nigeria Electrification Project under the Rural Electricity Agency (REA), according to the Managing Director of REA, Ahmad Salihijo, aims at addressing the energy access challenge through mini-grids, solar home systems and the Energising Education Programme (EEP) of the Federal Government.

The Abuja Feeding Scheme Project includes, the construction of five transmission substations (two 330 kV and three 132 kV). The project should add at least 624 MW of wheeling capacity, and supply electricity to residents and businesses in and around Abuja.

Reportedly, the Northern Corridor Transmission Project would strengthen transmission capacity in the North while creating the enabling environment for power evacuation to West African Power Pool (WAPP) and establish the backbone for new transmission loop in the north west part of the country.