The Transmission Company of Nigeria (TCN) may consider Public-Private Partnership (PPP) arrangement in the mix of options available to it to upgrade the capacity of Nigeria’s national grid, THISDAY has learnt.
THISDAY gathered that funding for the PPP option was part of the larger $486 million loan Nigeria received from the World Bank in February 2018 to expand the capacity of the electricity transmission network.
The $486 million loan facility to Nigeria has a five-year moratorium and a 30 years repayment window.
It was also learnt that out of the $486 million loan facility, the TCN would use about $32 million to prepare the transaction documents as well as procure a private developer for a pilot PPP arrangement for its transmission network.
TCN recently embarked on a comprehensive rehabilitation and expansion of the network.
According to a World Bank document on the $486 million loan seen by THISDAY, the proposed PPP arrangement would be part of the TCN’s network expansion plan as contained in its Transmission Rehabilitation and Expansion Plan (TREP).
This would include construction of greenfield transmission infrastructure, perhaps by a third party.
The World Bank’s $486 million credit facility for the TCN is divided into four components with the PPP schedule included.
The first component comprised of the transmission network strengthening and improvement which is worth $408 million.
The federal government will provide $4 million while the World Bank’s International Development Agency (IDA) Scale-Up Facility (SUF) will provide $404 million.
According to the World Bank, it’s investment in the TCN will increase the power transfer capacity of the transmission network and enable distribution companies supply consumers with additional power.
It explained that together with other investments and policy measures, the project would contribute to ensuring adequate and reliable electricity supply that is necessary for Nigeria’s continued economic development.
“It will also support private sector participation, capacity development and better governance in TCN and sector institutions,” it added.