JONATHAN SEEKS NASS NOD TO BORROW $4.4bn

President Goodluck Jona-than is seeking the approval of the National Assembly to take $4.427 billion external loan to finance “critical infrastructure” in the country.
And in a renewed effort to address the epileptic power supply in the country, President Jonathan has approved the construction of a new national supergrid to complement the aging 330/132kv transmission infrastructure in the country.

Meanwhile, President Jonathan will on August 26, 2010 present a new roadmap for the reformation of the country’s power sector to the private sector.
In a letter to Senate President David Mark and read on the floor of the Senate, President Jonathan sought for $4.4 billion external loan, explaining that the National Assembly had earlier given its nod for the Federal Government to obtain an initial sum of $1,854.71 million from International Development Association (IDA), being component of the negotiated projects.

The borrowing plan, he said, was “segmented for purposes of comprehension into three broad categories namely: projects that had been negotiated and those that were being appraised as well as the pipeline projects/programmes”.
Jonathan said: “The sum total for the negotiated projects stood at $1,854.71 billion and that of the appraised projects was $1.073.2 million while $2,415 billion represented the sum of the pipeline projects. The three categories of projects come to a total of $5.242 billion.

“In consideration of the 2010 budget in conjunction with the aforementioned borrowing plan, the National Assembly graciously appro-ved only the International Development Association component of the negotiated projects in the sum of $915 million out of $1,854.71, leaving a balance of $939.71 for negotiated projects, $1,073.2 million for appraised projects and $2,415 billion for pipeline projects. The entire balance now remaining for National Assembly’s approval is $4,427.91.”

The President noted that the approval of the outstanding 2010 external borrowing plan would enable the administration to fast track “the provision of critical infrastructure, which the country is in dire need of to jump-start the engine of economic growth and improve the living standards of the citizens”.
He said further: “It is pertinent to add that the proposed loans are highly concessionary credit facilities, which the country needs to access in order to develop our infrastructure and create employment opportunities.

“I have directed the honourable minister of finance to effectively monitor the various projects to ensure that the funds are judiciously utilized and that there is value for money.
“In furtherance of my directive, the ministry held a country portfolio review with the participation of all donor agencies, the 36 states and FCT in Abuja from 8th – 9th July 2010 and has also begun the implementation of the borrowing guidelines as agreed with the National Assembly.

“Considering the huge infrastructure deficit currently being experienced in the country and the enormous financial resources required to fill the gap coupled with the budgetary provisions without resources to external borrowings, I implore the Senate to reconsider the 2010 Borrowing plan with a view to approving the entire package to enable us engage in the negotiations and completion of the requirements for accessing the funds.”

Special Adviser to the President on Media and Publicity Ima Niboro said the new 700 KV supergrid, which will be completed in four years at a projected cost of $3.5 billion, will transmit power across vast distances that are beyond the capacity of the existing 330/132KV grid.
According to Niboro in a statement last night, the President, who granted the approval at the weekly meeting of the Presidential Action Committee (PAC) on Power which he chairs, also directed that the project be funded as a federal asset with additional financing from private investors and international finance and development agencies.

“The supergrid, which will run along the same route as the existing 330/132KV grid will also address Nigeria ’s future energy challenges including transition to more sustainable energy sources, reduction of power loss per transmitted megawatt and improving power voltage profiles across the country,” he said.
As the country grapples with inadequate power supply, experts said with the existing generation and Federal Government’s projections, there is bound to be supply shortfall, which will persist if modern transmission infrastructure that is commensurate with the projected growth is not put in place.

According to these experts, despite the increasing demand for electricity, the country has continued to rely on the 330/132kv introduced in the early 1960’s, leading to decreasing transmission capacity and power loss.
Niboro said the main advantage of the 700 KV supergrid over the existing 330/132 KV grid was that it would significantly reduce the huge amount of power currently lost in transmission.

“Without the supergrid, the quantum of power lost in transmission will continue to increase as more power progressively becomes available for evacuation from new and rehabilitated generating stations. Periodic systemic failures will also become more frequent,” he said.
The Presidential Task Force on Power (PTFP) had projected that Nigeria’s available generation capacity would rise to 6,939 megawatts by April next year and 14,019megawatts by December 2013.

Meanwhile, the President will on Thursday, August 26, 2010 in Lagos present a new roadmap for the reformation of Nigeria ’s power sector to the country’s private sector.
Niboro said President Jonathan would seize the opportunity of the event to acquaint members of the private sector with fresh investment opportunities inherent in the power sector reform programme and invite greater private sector support for the programme.

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