The Federal Government has secured a loan of $170 million from the French Development Agency (FDA) to boost power transmission in the Federal Capital Territory (FCT).
Labaran Maku, Minister of Information who briefed State House correspondents after the weekly Cabinet meeting said the loan was given on exceptionally concessionary grounds.
According to him, Cabinet gave approval following a memo brought to Council by the Minister of Finance, Ngozi Okonjo-Iweala.
“The loan which is usually given on exceptionally concessionary grounds to developing countries and friendly countries by the French government was taken to undertake 270 kilometres transmission lines and the construction of additional substations aimed at boosting power supply in the FCT.
“In this instance, when the French President visited our President during the centenary celebration, both leaders accepted the need for this loan which is to support the power infrastructure in Abuja.
“Abuja is one of the fastest growing cities in the world and certainly the fastest growing city in Africa.
“We need to continually update infrastructure, particularly power supply, to the city as it expands from the city centre outwards.
We’re happy because this loan was taken and it shows the confidence of the French government in the Nigerian economy,” Maku explained.
Also speaking, Okonjo-Iweala, who doubles as the Coordinating Minister for the Economy, said it is a soft credit offered at 1.56% interest rate per annum, commitment charge of 0.5% per annum and a service charge of 0.25% per annum payable on the amount withdrawn.
“The loan is for 20 years with a seven years grace period, that means moratorium on payment for seven years and the rest payable over twenty years.
“The Ministry of Power has set forward an emergency transmission programme for the entire country requiring $1.9bn and we’ve been able to raise $1.2bn so far of very soft credits.
“This $170million from the French Development Agency is part of that package. The balance of the package comes from the World Bank, $700million and the Japanese $200million. We’ve 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 very early on, it was shelved until we asked the French Development Agency to renew it and fast-track it and that’s how we came to approve that today,” Finance Minister said.
