Pipeline Projects: Senate demands rationale for $7.9bn Foreign Loans

The Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, and several state governors represented by their state Finance Commissioners appeared before the Senate to defend the $7.9 billion foreign loans sought from the Exim Bank of China, Islamic Bank, African Development Bank (AfDB) and the French Development Bank (AFD).

The project is part of Federal Government’s proposed pipeline projects under the Medium Term 2012 to 2014 External Borrowing Plans, which is before the Senate Committee on Foreign Loans and Debt.

Okonjo-Iweala, who was represented by the Minister of State for Finance, Mr. Yerima Ngama, had earlier sent the proposed pipeline projects foreign borrowing plan to the upper chamber, which had scaled through several deliberations and readings before it was transmitted to the various committees for final scrutiny.

The breakdown of the loans revealed that all states in the country applied for the loan of about $3.39 billion, while the Federal Government applied for $4.8 billion. Continuation of Eurobond Issuance $1 billion, Diaspora bond$0.1 billion putting the loan of the loan at $9. 005.69 billion.

Privatization: N330bn needed to offset PHCN creditors

A whopping N330 billion is needed to offset to the Power Holding Company of Nigeria, PHCN, creditors before privatization can take place. This was revealed by the Managing Director of the Nigeria Electricity Liability Management Ltd, NELMCO, Dr Sam Agbogun.

Agbogun said the company needed more than N330 billion to settle creditors of PHCN before a smooth and full privatization could take place. According to him, “majority of the debts owed by PHCN are with the Independent Power Producers, IPPs, who are generating power now and PHCN cannot pay them because of the low tariff it is charging. So, everyday as power is being consumed, we owe the power producers more”.

He also pointed out that some power stations, such as Kainji and Jebba were built with foreign loans, noting that the loans had not been fully paid, hence NELMCO would allow DMO to clear up such debts. He listed the debts/liabilities owed by PHCN to include PHCN’s pensioners, IPPs, financial institutions and other creditors, foreign and local, who had supplied PHCN with materials or services for their functions but are yet to be paid.