World Bank announces $1.2 billion Nigerian power finance package

• 9 years ago (2014-05-09)
• Junior Isles

Africa 303

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The World Bank has announced that it has approved a package of loans and guarantees totalling almost $1.2 billion to support energy infrastructure projects in Nigeria.

The executive directors of the World Bank, International Finance Cooperation (IFC) and Multilateral Investment Guarantee Agency (MIGA) all approved the finance package, which is aimed at boosting independent power generation in Nigeria and easing ongoing energy shortages in Africa’s largest economy.

The package includes partial risk guarantees of up to $245 million for the 459 MW Azura Edo gas-fired power plant near Benin City, Edo State and up to $150 million for the 533 MW Qua Iboe gas-fired plant in Ibeno.

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

The World Bank Group said these specific power projects are a core element of its energy business plan for Nigeria.

In a statement, the World Bank has said the IBRD guarantees are designed to augment the country’s power sector reforms and set industry benchmarks in order to help build market confidence.

Makhtar Diop, World Bank Vice President for the Africa Region, said he was glad that the World Bank was able to support Nigeria’s energy reform programme and help provide direct assistance to increase generation capacity through mobilising over $1 billion of private sector financing.

“Efficient, affordable and reliable access to electricity is essential for small and medium-sized enterprises in Nigeria to accelerate job creation,” said Diop.

The World Bank believes harnessing Nigeria’s extensive natural gas reserves, the 8th largest in the world, can help improve power availability domestically and around neighbouring West African countries.