AFDB Plans $200 Million Boost to Nigeria’s Power Risk Guarantees
8 April 2014
The African Development Bank is in talks with Nigerian officials to boost the value of its partial-risk guarantee for power industry investments by $200 million this year.
An agreement would see the amount from which eligible projects can benefit rise to $380 million from $180 million, Bocar Toure, senior energy economist at the African Development Bank, said today by phone from Lagos, Nigeria's commercial capital.
"The partial-risk guarantee is there to enhance the creditworthiness of the bulk trader," said Toure. "Usually a lot of investors that are hesitant will feel more comfortable with the guarantee."
Nigeria is building an electricity market after handing over 15 state-owned power utilities to private companies in November.
In 2010, it created the Nigerian Bulk Electricity Trading Plc to act as a clearing house for power generating and distribution companies, which will guarantee all purchases in the market´s transitional phase expected to last five to 10 years, Chief Executive Officer Rumundara Wonodi said.
Some of the funds from the AFDB would be used to support the bulk trader and keep the power market afloat, according to Toure.
Original article by Yinka Ibukun