N15.7b loan goes to water, power projects
From Alifa Daniel, Abuja
A N15.7 billion ($114 million) World Bank loan secured by the Federal Government for the Bureau of Public Enterprises (BPE) will be used by the agency to complete the on-going reforms in the power and water sectors. It will also be used to prepare and execute the divestiture of government's equity in 100 public enterprises.
The credit facility obtained under the Privatisation Support Project (PSP) will be used to complete the on-going reforms in the telecommunications and power sectors.
The loan, which was granted to Nigeria on International Development Agency (IDA) items, will equally go into preparing the private sector to participate in the operation of the Lagos State Water Corporation (LSWC).
In the LSWC, the credit facility will be committed to the "strategic review of the polices and regulatory framework for the urban water sector, due diligence, financial and legal restructuring, asset value of LSWC and carrying out a labour programme, through provision of advisory and consulting services.
In a statement the BPE submitted to the National Assembly, it explained that the fund would be used to acquire and install equipment, repair essential plants and provide essential services, as well as improve on the supply of potable water, billing and revenue collections.
The report showed that the PSP loan became effective in the last quarter of 2001 while conditions were met in May 2002.
"Accordingly, funds disbursement has commenced, resulting in more efficient application of monies for the implementation programme", it said.
Under the IDA terms, the loan attracts 0.75 per cent yearly interest rate with a grace period of 10 years but the BPE loan is expected to be paid in 35 years.
In the power sector, the facility will be used to prepare a new policy and regulatory framework for the unit.
Other uses are the establishment of the Nigerian Electricity Regulatory Commission (NERC) as an autonomous regulatory agency.
The restructuring of the National Electric Power Authority (NEPA) resulting in the creation of separate generation transmission, distribution and system control entities and design of wholesale marketing operations through the provision of advisory and consulting services.
