Nigeria: World Bank mobilises US$1.7 billion to boost power generation in Nigeria

Abuja, Nigeria (PANA) – The World Bank Group Wednesday announced, on the sidelines of the World Economic Forum Africa (WEFA) summit holding in Abuja, that it has mobilized about US$1.7 billion to boost the reforms of Nigeria’s power sector and enhance electricity generation in the country.

The Group, which stressed how efficient, affordable and reliable access to electricity was essential for small- and medium-sized enterprises in Nigeria to accelerate job creation, also announced various project series to support increased electricity in the country.

In a statement, released in Abuja, Vice President in charge of the Africa Region at the World Bank, Makhtar Diop, said: "I am glad that we were able to support Nigeria’s extensive energy reform programme and provide direct assistance to increase generation capacity by mobilizing nearly US$ 1.7 billion of private sector financing through a range of instruments.

According to the statement, "These projects are a critical element of the World Bank Group Energy Business Plan for Nigeria. World Bank partial risk guarantees approved include up to US$245 million for the 459-megawatt (MW) Azura Edo power plant near Benin City, Edo State; and up to US$150 million for the 533-MW Qua Iboe plant in Ibeno, Akwa Ibom State.

"The World Bank, IFC and MIGA Board of Executive Directors have approved a package of loans and guarantees supporting a series of energy projects that will help boost independent power generation and ease crippling energy shortages in the Federal Republic of Nigeria, Africa’s largest economy. Both plants are gas-fired.  

"The Boards of IFC and MIGA approved loans and hedging instruments of up to US$135 million and guarantees of up to US$659 million for the Azura Edo project.  

"The IBRD guarantees include forward-looking mitigation and risk-sharing arrangements, designed to augment the country’s power sector reforms while building market confidence and setting industry benchmarks.  

"IFC's investment and MIGA's guarantee for the Azura Edo power plant will support a trail blazing project at the centre of Nigeria's ambitious power sector programme, while setting a replicable model for future power projects."

The Bank said Nigeria was hugely endowed with abundant energy resources, including the world’s eighth largest reserves of natural gas.

It noted: "Yet 65 per cent of its population – some 100 million people – has no access to electricity. Unlocking the flow of Nigeria’s extensive natural gas reserves will expand power supply and energy exports to neighbouring countries in the West Africa Power Pool.

"Support to private sector-financed independent power producers (IPPs) forms a critical part of the Nigerian Government’s Power Sector Reform Roadmap, a strategy to improve power services throughout the country that is widely supported by the Nigerian public."

The Bank said it expects the Azura Edo IPP to have a strong demonstration effect and to set a precedent for future private sector.

Meanwhile, there is excitement in the power sector over the interests so far shown by some prospective investors attending the World Economic Forum on Africa in Abuja.

To harness the interests, the Minister of Power, Prof. Chinedu Nebo, and his team are hosting a Power Forum Breakfast on Thursday morning.

The Forum targets investors who are attending the World Economic Forum on Africa, especially those who have indicated special interest in the power sector, the Ministry of Power said in a statement Wednesday in Abuja.
-0- PANA MON/VAO 7May2014

07 may 2014 15:07:18

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