The World Bank has restructured a $350 million loan to Nigeria to ensure the completion of seven critical power plants in educational institutions, bolstering the nation’s energy infrastructure.
According to the Restructuring Paper on the Nigeria Electrification Project (NEP), this restructuring involves an extension of the project’s closing date, with the new deadline for the loan project set to December 31, 2024.
The Nigeria Electrification Project (NEP), initially approved on June 27, 2018, aims to increase access to electricity services for households, public institutions, and underserved micro, small, and medium enterprises (MSMEs).
Despite progress, the completion of the seven power plants, integral to the project’s success, faced delays due to unforeseen challenges such as geotechnical issues, community disturbances, and COVID-19-related disruptions.
The Restructuring Paper document read: “To ensure the delivery of all 7 power plants as per the original scope of work, including unforeseen but necessary additional tasks, the project closing date would need to be extended by an additional 5 months to December 31, 2024.
“While the revised completion date for all 7 plants is expected by the end of Q3 2024, with the Maiduguri and Calabar sub projects anticipated to close by the end of September 2024, the last quarter will focus on site handover and the commencement of the sustainability plan. During this phase, the EPC contractors are expected to provide a performance guarantee to cover the operational and maintenance period.”
The Nigeria Electrification Project (NEP) focuses on several components, including the development of private sector mini-grids, expansion of standalone solar systems for poor and vulnerable households, and provision of sustainable power to public universities and associated teaching hospitals.
As of June 2024, the project had connected almost 59,000 households and MSMEs through mini-grid grants and nearly 1.09 million households and MSMEs via standalone solar systems.
Despite these achievements, Component 3, which involves the Energizing Education Program Phase II (EEP II), has lagged, with completion levels ranging from 35% to 80% across different sites.
Based on the Restructuring Paper document, the total commitment for the Nigeria Electrification Project (NEP) is $350 million. As of the latest update, $265.32 million has been disbursed, leaving an undisbursed balance of $84.68 million.
