Abuja, Nigeria — ESI-AFRICA.COM — 21 October 2011 – The Federal Government has entered into an agreement with the United States which will allow Nigeria’s independent power plants (IPP’s) access to a US$1.5 billion concessionary loan for the acquisition of equipment and services.
A Memorandum of Understanding for the US$1.5 billion long-term single digit interest rate loan was signed here between Nigerian minister of power Bart Nnaji, and president of US Export Import Bank Fred Hochberg.
The facility will be 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.
allAfrica.com reports that 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 4,000MW to between 15,000- and 20,000MW by 2015, and 40,000MW by 2020.
This agreement, when fully operational, will provide bankable funds for the purchase of goods and services from indigenised US firms for expansion of Nigeria’s electricity infrastructure.