Nigeria's cabinet approves taking out of fresh $1bn Chinese loan to fund hydro-electric power plant

NIGERIA'S Federal Executive Council (Fec) has approved a government decision to obtain a $1bn bank loan from China's Exim Bank to fund the Gurara II Hydropower project as part of ongoing plans to increase electric capacity in the country.

Currently, Nigeria only generates less than 4,000MW of power, which is hopelessly inadequate to meet demand which is about 10 times that. Consequently, the government is looking for numerous ways to boost generated power through the construction of hydro-electric, gas, solar and thermal power plants across the country.

As part of this plan, this morning the cabinet approved the obtaining of a fresh loan to built a power plant on Gurara Falls in Niger State. At the meeting, the FEC also approved spending of N5.7bn ($15.7m) as the revised estimated cost for the completion of the Nkari Dam in Akwa Ibom State.

Water resources minister Sulieman Adamu, said: “The Federal Executive Council approved a $1bn Chinese loan from Chinese Exim Bank for the Gurara II Hydropower project which has the capacity to generate 360MW of electricity. Also, the council approved N5.7bn as the revised total estimated cost for the completion of Nkari Dam in Akwa Ibom. “

"In addition, the council also approved the appointment of consultants to resuscitate the Gari Irrigation Project in Kano/Jigawa States. In 2017, the council had approved the resumption of the project which was earlier abandoned for 17 years, so this is the same consultant that was appointed in 1998 and contractors are already on site."

He added that the council also approved the revised estimated total cost of N10.4bn for the completion of Ile Ife Dam in Osun State. This is a  project that was started in 2004 and abandoned but is now expected to be completed with a period of 24 months.

Works, power and housing minister Babatunde Fashola said: "My ministry presented two memos, one was for the construction of an inter-change and pedestrian bridge at Abaji in Abuja for N7.197bn to address the perennial problem of accidents in that place which was approved by council. The second memorandum was for the procurement of 200,217 meters by the Yola Electricity Distribution Company Under the Meter Asset Providers  Scheme. 

“As you might know, Yola Electricity Distribution Company is the distribution company that was surrendered to by the original holder, so it’s currently under the federal government’s management. They are buying 200,217 meters for consumers under their franchise which covers Adamawa, Borno, Taraba and Yobe States."

He added that the cost of those meters is N11.208bn and the purchase is to be funded from the judgement sum that the FEC had previously approved. According to Mr Fashola, the money is currently in a bank and as consumers pay for the meters as they are supplied, the money will go back into that account.