Power: FG, US Seal $1.5bn Loan Deal for IPPs

This Day

20 October 2011

Power: FG, US Seal $1.5bn Loan Deal for IPPs

The Federal Government Wednesday entered into an agreement with the America government which will allow Nigeria’s Independent Power Plants (IPPs) access to about $1.5 billion concessionary loan for the acquisition of equipment and services from the US.

A Memorandum of Understanding (MoU) for the $1.5 billion long-term single digit interest rate loan was signed between the Minister of Power, Prof. Bart Nnaji, on behalf of the Federal Government and President of US Export Import Bank (Ex-Im Bank), Mr. Fred Hochberg, for the US government in Abuja.

The facility is managed by the US Ex-Im Bank, a government agency that provides export-credit insurance and financing, among other services, to help foreign buyers purchase US goods and services.

Prospective investors in Nigeria’s emerging power sector will be expected to plug into the loan aimed at securing financial backup for the purchase of power equipment and services from renowned US manufacturers of power equipment.

Nigeria intends to increase its power production from the current level of 4000mw to about 15,000-20,000mw by 2015, and 40,000mw by 2020.