06 March 2014, Abuja – Minister of Information, Labaran Maku yesterday said the Federal Executive Council (FEC) has given the Federal Ministry of Finance the approval to borrow $170 million for power infrastructure in the Federal Capital Territory (FCT).
He made the disclosure while briefing State House correspondents at the end of the FEC meeting presided over by President Goodluck Jonathan.
The loan from the French Development Agency, he said, is to undertake 270 kilometer transmission lines and construct additional substations within the FCT.
He also said FEC ratified the earlier approval given to the Federal Ministry of Finance to float a diaspora bond of about $100-$300 million to enable Nigerians living outside the country invest in Nigeria.
On the FCT Power loan, he said: “FEC ratified an earlier approval given to the Federal Ministry of Finance to borrow $170million from the French Development Agency to beef up power nfrastructure in the FCT, Abuja.
“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 kilometer transmission lines and the construction of additional substations within the FCT and to build additional power substations in the FCT to boost power supply in the FCT.
“In this instance, when the French president visited, following discussions with the Nigerian government, the two 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 the continent of Africa.
“We need to continually update infrastructure, particularly power supply to the city as it expands from the city centre outwards. We are happy because this loan was taken and it shows the confidence of the French government in the Nigerian economy.”
Speaking on the diaspora bond, Maku said: “FEC also, in continuation of the president’s promise to involve all Nigerians particularly in the diaspora, in the Transformation Agenda, ratified the earlier approval by the president which was given to the Federal Ministry of Finance to float a diaspora bond of about $100-300million to enable Nigerians living out of this country to invest in the country.”
The Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala further explained that the $170 million is a very soft loan attracting1.56 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, she said, is for 20 years with a seven years grace period or moratorium on payment while the rest is payable over 20 years.
She said: “This loan is to boost transmission in the FCT, to make sure that we keep ahead of the demands for electricity in the FCT. “This was one of the loans that was signed when the French president came for the centenary celebrations, because we had an anticipatory ratification from the president and it was ratified today (yesterday) by Council.”
– The Nation