FG, states get NEC's approval to borrow $9bn
The National Economic Council on Thursday approved the plan by the federal and state governments to borrow $9bn from some international organisations.
The council, chaired by Vice-President Namadi Sambo, has all the state governors and ministers of National Planning, Federal Capital Territory and Justice as members.
Governors Peter Obi (Anambra); Liyel Imoke (Cross River); and Umar Garba (Taraba) as well as the Minister of National Planning, Dr. Shamsudeen Usman; and Minister of State for Power, Mrs. Zaynab Kuchi, briefed journalists on the outcome of the meeting.
Usman said the approval was granted based on a presentation made by the Minister of Finance, Dr. Ngozi Okonjo-Iweala. He added that the nod had earlier been given by the National Assembly.
The minister said, 'The Coordinating Minister of the Economy briefed the NEC on the current facilities made available by different international funding organisations, including the Islamic Development Bank, International Development Association, African Development Bank, French Development Agency as well as Chinese and Indian Exim Banks totalling about $9bn for development of projects.
'The facilities which have up to 10 years moratorium and 40 years repayment periods are available to both the federal and state governments to fund high impact projects towards improving infrastructure, agriculture and employment generation.
'The council urged the states to endeavour to meet the requirements for the loans and to ensure that the facilities are meant to fund meaningful projects in their states.'
On power, Imoke said the council approved the sourcing and immediate release of $3.37bn bridge funding for the sector pending the realisation of proceeds from generation asset sale.
He said the decision was taken as a means of solving the envisaged significant transmission constraint by the end of the year and bridging the gap for counterpart funding in hydro plants.
The governor said it was resolved that $1.65bn should be disbursed to fund critical transmission infrastructure while $1.72bn should be used to fund hydro generation.
He added that it was recommended that the proceeds from sale of generation assets be utilised for reinvestment in transmission and hydro projects.
'The committee set up by the council highlighted the over $4bn NIPP investment already made in generation which has produced additional 4,774MW generation capacity by NDPHC and would have raised the overall generation capacity in Nigeria to 9,582 MW in December 2013 in line with the nation's updated generation capacity target of 20,000 by 2020.
'It further noted that investing in the needed transmission infrastructure would ensure, among other benefits, the needed return on investment, the maximisation of proceeds from the sale of the generation assets, improved GDP growth rate as well as ensure effective distribution of generated power to the ultimate consumers,' he said.
Imoke added that the council also recommended that 11 small dams spread across the country should be accommodated in the funding plan because of their potential for boosting power, water supply and agriculture in the country.