The Federal Executive Council on Wednesday approved a loan of $170 million from the French Development Agency for a power transmission project in the Federal Capital Territory.
The Minister of Information, Labaran Maku, while briefing State House correspondents after the weekly FEC meeting, said the loan was approved following a memo brought to Council by the Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala.
Maku explained: “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 kilometres transmission lines and the construction of additional substations aimed at boosting power supply in the FCT.
“In this instance, when the French President visited our President during the centenary celebration, both 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 Africa.
“We need to continually update infrastructure, particularly power supply, to the city as it expands from the city centre outwards.
“We’re happy because this loan was taken and it shows the confidence of the French government in the Nigerian economy.”
Okonjo-Iweala, while corroborating her information colleague, said the loan is a soft credit offered at 1.56 per cent interest rate per annum, commitment charge of 0.5 per cent per annum and a service charge of 0.25 per cent per annum payable on the amount withdrawn.
She also explained: “The loan is for 20 years with a seven years grace period, that means moratorium on payment for seven years and the rest payable over twenty years.
“The Ministry of Power has set forward an emergency transmission programme for the entire country requiring $1.9 billion and we’ve been able to raise $1.2 billion so far of very soft credits.
“This $170 million from the French Development Agency is part of that package.
“The balance of the package comes from the World Bank, $700 million and the Japanese $200 million.
“We’ve 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 very early on, it was shelved until we asked the French Development Agency to renew it and fast-track it and that’s how we came to approve that today.”