Nigeria secures another $3 billion World Bank loan

Emerging reports say that the World Bank has approved a $3 billion loan for Nigeria. The facility is intended to assist the country deal with its power generation, transmission and distribution challenges.

This was confirmed by the Minister of Finance, Budget, and National Planning, Zainab Ahmed, during a press briefing on Sunday at the World Bank/International Monetary Fund (IMF) Annual Meeting ongoing in Washington DC, United States.

According to the minister, “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 the loan will be released to Nigeria in 4 tranches of $750 million and there is room to expand the loan to $4 billion. This means Nigeria can compound the $3 billion with an additional $1 billion.

“…if we are able to expand to $4 billion then the extra $1 billion will be for the distribution network.

“It will be a loan to the distribution companies because they are owned by the private sector.” – Ahmed

Though, the Federal Government had planned to have the $3 billion loan disbursed in 2 tranches of $1.5 billion.

A team from the World Bank is expected to visit Nigeria by April 2020 to get approval for the release of the first tranche of $750 million.

Last month, the World Bank and Nigeria had started talks to get as much as $2.5 billion from the World Bank in a new concessionary lending, according to Hafez Ghanem, World Bank’s Vice President for Africa.

Faced with revenue shortfalls in the output and price of oil, President Muhammadu Buhari’s administration has increased borrowing to finance government spending, with domestic debt at N17.4 trillion and foreign loans at $27.2 billion as at June ending this year.

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