World Bank approves $1.19bn guarantee for power sector

The World Bank Group has approved partial risk guarantees to help power sector operators in the country to borrow up to $1.19bn to execute various projects.

A statement released in Washington on Wednesday said the Board of Executive Directors of the three arms of the World Bank approved the package of loans and guarantees supporting a series of energy projects that would boost independent power generation and ease crippling energy shortages in Nigeria.

It said the projects were critical elements of the World Bank Group’s Energy Business Plan for the country.

The World Bank, International Finance Corporation and Multilateral Investment Guarantee Agency’s approved partial risk guarantees include up to $245m for the 459-megawatt Azura-Edo Power Plant near Benin City, Edo State; and up to $150m for the 533-MW Qua Iboe plant in Ibeno, Akwa Ibom State. Both plants are gas-fired.

The boards of the IFC and MIGA approved loans and hedging instruments of up to $135m and guarantees of up to $659m for the Azura-Edo project.

The Vice-President, Africa Region, World Bank, Mr. Makhtar Diop, said efficient, affordable and reliable access to electricity was essential for Small and Medium-sized enterprises in Nigeria to accelerate job creation.

“I am glad that we were able to support Nigeria’s extensive energy reform programme and provide direct assistance to increase generation capacity by mobilising nearly $1.7bn of private sector financing through a range of instruments,” Diop said.

The IBRD guarantees include forward-looking mitigation and risk-sharing arrangements, designed to augment the country’s power sector reforms, while building market confidence and setting industry benchmarks.

The IFC’s investment and MIGA’s guarantee for the Azura-Edo power plant will support a trail blazing project at the centre of Nigeria’s ambitious power sector programme, while setting a replicable model for future power projects.

The Regional Vice-President, IFC, Mr. Jean Prosper, said addressing energy needs in Nigeria required investment from the public and private sectors, adding that working with the World Bank Group would help to catalyse significant private investment in an environment that best assured of successful delivery of increased power supply.

[Punch]

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