06 March 2014, Abuja – The Federal Executive Council on Wednesday ratified an anticipatory approval given by President Goodluck Jonathan to the Ministry of Finance to borrow $170m from the French Development Agency.
The loan is meant to beef up power infrastructure in the Federal Capital Territory.
The Minister of Information, Mr. Labaran Maku, and the Minister of Finance, Dr. Ngozi Okonjo-Iweala, briefed State House correspondents at the end of the meeting, which was presided over by Jonathan.
Okonjo-Iweala said the loan, which would be used to undertake the construction of 270-kilometre transmission lines and additional substations within the FCT, was one of the agreements that were signed when the French President, Francois Hollande, visited the country for the centenary celebration last week.
She said, “It is a $170m soft credit. The terms include 1.56 per cent interest rate per annum; commitment charge of 0.5 per cent per annum; and then, a service charge of 0.25 per cent per annum payable on the amount withdrawn.
“The loan is for 20 years with a seven-year grace period; that means, moratorium on payment for seven years; and the rest payable over 20 years.
“This will help to boost our transmission. As you know, the Ministry of Power has set forward an emergency transmission programme for the entire country requiring $1.9bn, and we have been able to raise $1.2bn so far of very soft credits.”
The minister added, “This $170mn from the French Development Agency is part of that package. The balance of the package comes from the World Bank with $700m, and the Japanese government, $200m. We have 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, it was shelved until we asked the French Development Agency to renew it and fast-track it, and that is how we came to approve that today.”
– The Punch