The National Economic Council, NEC, has approved another $9billion (N1.4 trillion) loan package for State and Federal governments under the 2012 to 2014 borrowing plan. The borrowing plan had earlier been approved by the National Assembly.
This is even as it approved a bridging fund of $3.37 billion (N522 billion) for the development of the power sector from the federation account. The bridging fund will be used to support the sector pending the realization of the full proceeds from the sale of two subsidiaries of the Power Holding Company of Nigeria: generating companies, Gencos; and distribution companies, Discos.
The approval of the loan followed the reports made to the Council by the Minister of Finance and Coordinating Minister of the Economy, Ngozi Okonjo-Iweala, on the current facilities made available by different international funding organizations including Islamic Development Bank, IDA; African Development Bank; French Development Agency; as well as Chinese and Indian Exim Banks totaling about $9 billion dollars for projects development.
The Minister of National Planning, Shamsudeen Usman, stated this while briefing journalists after a meeting of the National Economic Council at the Presidential Villa; alongside Governor Liyel Imoke of Cross River State, Peter Obi of Anambra State, Acting-Governor of Taraba State, Garba Umar; and the Minister of State for Power, Zainab Kuchi.
The loan facilities which have up to 10 years moratorium and 40 years repayment periods are available to both the Federal and State Governments to fund high impact projects towards improving infrastructure, agriculture and employment generation.
Mr. Usman said that the Council further urged the states to endeavor to meet the requirements for the loans and to ensure that the facilities are meant to fund meaningful state projects.
Electricity in Nigeria
The NEC Ad-Hoc Review Committee on the Re-Investment Plan in the Power Sector led by Liyel Imoke, Governor of Cross River State, also presented its report to NEC.
Briefing on the report, Mr. Imoke said the committee stated that investing in the needed transmission infrastructure would ensure, amongst other benefits, the needed return on investment, the maximization of proceeds from the sale of the generation assets, improved GDP growth rate as well as ensure effective distribution of generated power to the ultimate consumers.
He said his committee highlighted the over $4 billion National Integrated Power Project investment already made in power generation which has produced an additional 4,774MW generation capacity by NDPHC and would have raised the overall generation capacity in Nigeria to 9,582 MW in December 2013 in line with the nation’s updated generation capacity target of 20,000 by 2020.
The governor noted that as a way of solving the envisaged significant transmission constraint by the end of this year and bridging the gap for counterpart funding in hydro plants, “the report recommended the utilization of the proceeds from sale of generation assets for reinvestment in transmission and hydro projects.”
“It also recommended the disbursement of $1.65 billion to fund critical transmission infrastructure as well as $1.72 billion to fund hydro generation and the sourcing and immediate release of $3.37 billion bridge funding pending the realisation of proceeds from generation asset sale,” he added.