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AfDB approves $210m financing for Nigeria transmission, distribution project

2nd December 2019 BY: Simone Liedtke
Writer

The African Development Bank (AfDB) has approved a $210-million financing package to the Federal Republic of Nigeria for the Nigeria Transmission Expansion Project (NTEP1), which seeks to rehabilitate and upgrade the nation’s power lines and improve both distribution and supply.

The project, which will run across the states of Kano, Kaduna, Delta, Edo, Anambra, Imo and Abia, will improve the capacity and reliability of the Nigerian transmission grid where it is most constrained.

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In a statement issued on Monday, the AfDB said the project would be executed by the Transmission Company of Nigeria (TCN) and that it was part of a $1.6-billion Transmission Rehabilitation and Expansion Programme.

Commenting on the loan approval, AfDB Nigeria senior director Ebrima Faal said the project “will contribute significantly to the reduction of Nigeria’s power deficit, decrease air and noise pollution and reduce the cost of doing business”.

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The bank’s financing, comprising a $160-million loan, and an additional $50-million loan from the Africa Growing Together Fund, will support the construction of 330 kV double circuit quad transmission lines and substations across the country.

The project will upgrade an existing 263 km of 330 kV lines, while adding an additional 204 km of new lines to increase TCN’s wheeling capacity, stabilise the grid and reduce transmission losses. 

The project will reduce the use of small-scale diesel generators and contribute to the reduction of greenhouse-gas emissions by saving about 11.4 t/y of carbon dioxide. The project will create about 2 000 direct jobs – 1 500 during construction and 500 during operations.

By increasing electricity supplies to small and medium-sized enterprises, the project would also foster the creation of additional indirect jobs, the AfDB noted.

AfDB acting VP for power and energy Wale Shonibare, meanwhile, said implementation of the project would increase evacuation capacity from the south of the country towards the north, where power supply was limited.

“NTEP1 will increase the grid transmission stability and capacity, and reduce the amount of stranded power, while improving power export and regional power system integration to the West African Power pool, especially through Niger and Benin interconnections,” he said.

Highlighting the project’s contribution to regional integration efforts, AfDB power systems development director Batchi Baldeh said the project would benefit from the bank’s expertise and proven record in leading the development of power grids across the continent, notably in West Africa.

Baldeh added that, in line with the bank’s work to improve utility performance, NTEP1 would “substantially strengthen the capacity of TCN with regard to the development of energy infrastructure projects, especially the adoption of modern and more efficient transmission technologies, which are most required in Nigeria for network improvements”.

NTEP1 is part of the AfDB’s response to the crisis in Nigeria’s power sector and is aligned with the government’s strategic plans articulated in its Economic Recovery and Growth Plan and Power Sector Recovery Programme.

The project also aligns with the bank’s High 5 priority to “light up and power Africa” and the New Deal on Energy in Africa. 

EDITED BY: Chanel de Bruyn Creamer Media Senior Deputy Editor Online
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