World Bank approves $ 100 mm credit for Nigerian power sector

Aug 02, 2001 02:00 AM

The World Bank approved a $ 100 mm credit to support the Federal Government of Nigeria's program for power sector reform and privatisation. The Transmission Development Project will address the inefficiencies of the power transmission of power and dispatch sub-sectors through:
-- Facilitating the restructuring of the National Electric Power Authority;
-- Establishing a transparently regulated, financially-viable and commercially-operated Transmission and System Operation Company with private sector participation;
-- Removing transmission network and system operation constraints in the provision of reliable power supply; and
-- Facilitating the development of an efficient wholesale power market to improve long-term performance of the power sector.

The power sector in Nigeria is characterized by high energy losses (30-35 % from generation to billings), a low collection rate (in the range of 75- 80 %) and low access to electricity by the population (about 36 %). Inadequate tariffs and inefficiencies in operations over the years have led to inadequate internal cash generation. The utility is heavily dependent on fuel subsidies and funding of capital projects by the Government. The project will help ease immediate power supply constraint on economic growth and contribute to a new restructured power sector which will reverse the current drain on the national budget.
The Transmission Development Project will be financed by a $ 100 mm credit from the International Development Association, the World Bank's lending arm for the poorest countries. The IDA credit is on standard terms of 35 years maturity, including 10 years grace.

Source: M2 Communications Ltd. via Newspage
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