Power supply: FG to take $170m French loan

The Federal Executive Council on Wednesday
ratified an anticipatory approval given by President
Goodluck Jonathan to the Ministry of Finance to
borrow $170m from the French Development
Agency.
The loan is meant to beef up power infrastructure in
the Federal Capital Territory.
The Minister of Information, Mr. Labaran Maku, and
the Minister of Finance, Dr. Ngozi Okonjo-Iweala,
briefed State House correspondents at the end of
the meeting, which was presided over by Jonathan.
Okonjo-Iweala said the loan, which would be used
to undertake the construction of 270-kilometre
transmission lines and additional substations within
the FCT, was one of the agreements that were
signed when the French President, Francois
Hollande, visited the country for the centenary
celebration last week.
She said, “It is a $170m soft credit. The terms
include 1.56 per cent interest rate per annum;
commitment charge of 0.5 per cent per annum; and
then, a service charge of 0.25 per cent per annum
payable on the amount withdrawn.
“The loan is for 20 years with a seven-year grace
period; that means, moratorium on payment for
seven years; and the rest payable over 20 years.
“This will help to boost our transmission. As you
know, the Ministry of Power has set forward an
emergency transmission programme for the entire
country requiring $1.9bn, and we have been able to
raise $1.2bn so far of very soft credits.”
The minister added, “This $170mn from the French
Development Agency is part of that package. The
balance of the package comes from the World Bank
with $700m, and the Japanese government, $200m.
We have been able to raise that all very soft credits.
“This project has been approved in the borrowing
plan since 2010; but after it was approved, it was
shelved until we asked the French Development
Agency to renew it and fast-track it, and that is how
we came to approve that today.”