The Federal Government will take another fresh external loan of $247.3m for the development of infrastructure, despite the country’s rising debt profile. The Federal Executive Council made the approval at its sitting in Abuja on Wednesday.
It came just days after the International Monetary Fund raised eyebrows over Nigeria’s current N24.38tn debt, advising the country to take borrowing slowly.
Briefing State House correspondents after the meeting rose, the Minister of Finance, Mrs Zainab Ahmed, gave a breakdown of the fresh loan.
She stated that $150m would come from the African Development Bank, to be spent specifically on rural electrification projects; $50m from Africa Grow Together Fund for other electrification projects; and $20m from French Development Agency, which would be loaned to the Lagos State Government.
Lagos plans to use the $20m to build new roads and rehabilitate existing ones.
Another $27.3m IADE facility was approved as part of the ‘North Core Dorsal Regional Transmission Project.’
This will be part of the West Africa Power Pool projects with a total loan requirement of $640m.
The minister explained that the projects were to connect Nigeria, Niger, Benin Republic, Togo, and Burkina Faso “with a high voltage 330 kilowatts transmission line, to facilitate energy trade among participant countries.”
The minister, who gave more details on the approvals by FEC, said, “Council approved three memos for Ministry of Finance. First, it approved a $150m loan facility from AfDB and $50m loan from African Grow Together Fund to finance the Nigerian electrification project. The project is a nationwide initiative to be implemented by the rural electrification agency.
“The project aligns with the strategy of the Federal Government on electrification of rural communities. The project has four components: First is solar hybrid mini-grid for rural economic development, the second is productive appliances equipment for up-grid communities, and the third is energising education while the fourth component is institutional capacity building.
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