Nigeria’s Power Sector is About to Get a $210m Lifeline From the AfDB. Will it Make a Difference?

A few days ago, the Africa Development Bank (AfDB) Group approved a loan of $210 million to the Federal Republic of Nigeria for the financing of the Nigeria Transmission Expansion Project (NTEP1).

Electricity transmission and supply is one subject that touches a nerve with many Nigerians. Inconsistent supply and blackouts reduce the standard of living of many citizens, and the question for many Nigerians is this: What is the Government doing about it?

For what it is worth, the AfDB loan update shows that something is being done about Nigeria’s power crisis.

What to expect from the AFDB-Nigeria power deal

With the AfDB approved $210 million loan ,highlighted targets areas that the money will go to include:

• 330KV double circuit and transmission lines and substations constructed across the country.
• Existing 263km of 330KV power lines upgraded for better performance.
• 204km of new lines added in order to increase TCN’s wheeling capacity.

It is hoped that meeting these targets will help stabilise the grid and reduce transmission losses.

Will the new power deal make a difference?

As the grid stabilises, the amount of electricity distributed to homes and businesses in the country is expected to also increase significantly because of transmission losses that have been reduced.

A recent review showed that businesses and homes in the country spend $14 billion yearly in generating electricity from diesel and petrol generators. Successful completion of this power project should help businesses save on the cost of operating generators for daily business activities.

“Nigerians and their businesses spend $14 billion annually on inefficient and expensive petrol or diesel-powered generators. This project will contribute significantly to the reduction of Nigeria’s power deficit, decrease air and noise pollution and reduce the cost of doing business,”

Ebrima Faal, AFDB’s Senior Director for Nigeria

Use of generators will be reduced, this will in turn reduce amount of harmful exhaust being released to the atmosphere and approximately 11,460kt of CO2 emissions will be prevented per year.

While the duration of this project has not been clearly stated, the project is expected to create 2000 direct jobs- 1500 during construction and 500 during operations. Indirectly, it will also reduce unemployment by making it easier for small and medium scale businesses to expand in their business operations.

The states where power insufficiency is most felt are the states where the NTEP1 will start. They include Kano, Kaduna, Delta, Edo, Anambra, Imo and Abia.

The NTEP1 is a part of the $1.6 billion transmission Rehabilitation and Expansion Programe (TREP) aimed at lighting up Nigeria.