Abuja - The Federal Executive Council (FEC) has approved the borrowing of $170 million from the French Development Agency to boost electricity supply in the Federal Capital Territory (FCT).
The Minister of Information, Labaran Maku, said this when he briefed State House correspondents on the outcome of the weekly FEC meeting, chaired by President Goodluck Jonathan.
He said an earlier anticipatory approval was given to the Federal Ministry of Finance to borrow the amount from the agency to beef up power infrastructure in the FCT.
The loan, which is usually given on exceptionally concessionary grounds by the French Government to very friendly countries, and in this instance when the French President visited, 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."
According to him, the loan will be used to undertake 270-kilometre transmission lines and the construction of additional substations within the FCT.
He said the loan would also be utilised in building additional power substations in the FCT to boost power supply.
“We are happy because this loan was taken and it shows the confidence of the French government in the Nigerian economy.’’
Also speaking on the soft loan, the Minister of Finance and the Coordinating Minister of the Economy, Dr Ngozi Okonjo-Iweala, said the loan was for 20 years with seven years grace period.
She said its terms included 1.56 percent interest rate per annum, commitment charge of 0.5 percent per annum and a service charge of 0.25 percent per annum payable on the amount withdrawn.
According to her, the Federal Ministry of Power has set forward an emergency transmission programme for the entire country requiring $1.9 billion.
She said that the Federal Government had been able to raise $1.2 billion so far of very soft credit, saying that the $170 million from the French Development Agency was part of that package.
“This project has been approved in the borrowing plan since 2010. 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.”
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