For Gas Supply to Bolster Electricity Generation, World Bank Provides $145 Million to Nigeria

The World Bank has announced $145 million in finance to Nigeria, to bolster gas supply for electricity generation – under its Partial Risk Guarantee (PRG) program. The Gas Supply and Aggregation Agreement (GSAA) was signed – yesterday, by the World Bank, the Power Holding Company of Nigeria (PHCN), Egbin Power PLC, Deutsche Bank and Chevron Nigeria Limited. In the 10-year period agreement, Chevron would continuously provide gas to Egbin Power Station. Speaking on the deal, the Country Director for World Bank in Nigeria, Marie Francoise Marie-Nelly, said, “With over 75 percent of Nigeria’s power generation depending on natural gas, assuring the availability and reliability of gas supply is a critical step in realizing the goal of un-interrupted electricity supply to Nigerian consumers.” According to its website, World Bank defines PRG as, “cover private lenders against the risk of a public entity failing to perform its obligations with respect to a private project.  PRGs ensure payment in the case of default resulting from the nonperformance of contractual obligations undertaken by governments or their agencies in private sector projects. PRGs typically cover outstanding principal and accrued interest of a debt tranche in full. Payment is made only if the debt service default is caused by risks specified under the guarantee.”

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This article was first published on 23rd April 2013

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