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4sAJ. zo85-UJIiDocumnent of
The World Bank
FOR OFFICIAL USE ONLY
Report No. P-3177-UNI
REPORT AND RECOMMENDATION
OF THE
PRESIDENT OF THE
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
TO THE
EXECUTIVE DIRECTORS
ON A
PROPOSED LOAN
TO THE
NATIONAL ELECTRIC POWER AUTHORITY
WITH THE GUARANTEE OF THE
FEDERAL REPUBLIC OF NIGERIA
FOR A
POWER TRANSMISSION AND DISTRIBUTION PROJECT
December 11, 1981
This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization,.
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CURRENCY EQUIVALENTS
Currency Unit = Naira (N)US$1 = NO.55Ni = US$1.82
MEASURES AND UNITS OF MEASUREMENT
1 kilometer (km) = 0.62 mile1 kilovolt (kv) = 1000 volts1 megawatt (MW) = 1,000 kilowatts1 megavolt ampere (MVA) = 1,000 kilovolt ampere1 ton of oil equivalent = 1,000 million keal
(t.o.e.)
ABBREVIATIONS
ECN - Electricity Corporation of NigeriaEIB European Investment BankNDA - Niger Dams AuthorityNEPA - National Electric Power Authority
FISCAL YEAR
January 1 - December 31
FOR OFFICIAL USE ONLY
NIGERIA - POWER TRANSMISSION AND DISTRIBUTION PROJECT
LOAN AND PROJECT SUMMARY
Borrower: National Electric Power Authority (NEPA)
Guarantor: Federal Republic of Nigeria
Amount: US$100.0 million, equivalent
Terms: Payable over 20 years, including 5 years of grace, at aninterest rate of 11.6 percent per annum. The Borrowerwould carry the foreign exchange risk.
Project Complementing the expansion of the Lagos distribution systemDescription: that was financed in part by Loan 1766-UNI, the proposed
project would rehabilitate and expand distribution facilitiesin 23 other cities and towns throughout Nigeria. In addition,power lines and substations would be installed to interconnectthe Igbin thermal generating station (which is about to be con-structed near Lagos) to the national high voltage network andto the Lagos distribution system.
The program of technical assistance financed under Loan1766-UNI would be sustained and strengthened by extending thestaff training program and by financing studies in a number ofareas critical to NEPA's organizational efficiency such asthe improvement of billing and revenue cQllection.
Project risks stem principally from NEPA's chronic shortageof qualified technical and managerial staff equipped to handlethe project. An intensive program of staff training togetherwith heavy reliance upon external technical support shouldkeep risks within reasonable limits.
This document has a restricted distribution and may be used by recipients only in the performance oftneir oiifcial duties. Its contents may not otherwise be disclosed without World Bank authorization.
Estimated Cost:Local Foreign Total
-------- (US$ Million) ------
Equipment, materials & construction
Igbin interconnection 14.5 38.6 53.1
Distribution in 23 cities 20.2 61.8 82.0
Consultant servicesGeneral design and supervision 5.9 4.9 10.8
Studies & training 1.8 4.9 6.7
Total Base Costs 42.4 110.2 152.6
Physical Contingencies 3.9 8.4 12.3
Price Contingencies 29.4 29.9 59.3
Total Project Cost (including import
duties of US$5.6 million) 75.7 148.5 224.2
Financing Plan:
Local Foreign Total
------- (US$ Million)-------
IBRD - 100.0 100.0
Federal Government Loans and/or Internal
Cash Generation 75.7 48.5 124.2
Total 75.7 148.5 224.2
Estimated Disbursements:
Bank Fiscal Year 1983 1984 1985 1986 1987
----------(US$ Million)--------
Annual 16.0 22.0 26.0 21.0 15.0
Cumulative 16.0 38.0 64.0 85.0 100.0
Rate of Return: 17.5 percent (for distribution in
23 cities)
Staff Appraisal Report: 3041-UNI, dated October 6, 1981
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
REPORT AND RECOMMENDATION OF THE PRESIDENTTO THE EXECUTIVE DIRECTORS
ON A PROPOSED LOAN TO NATIONAL ELECTRIC POWER AUTHORITYFOR A TRANSMISSION AND POWER DISTRIBUTION PROJECT
1. I submit the following report and recommendation on a proposed loanto the National Electric Power Authority (NEPA) with the guarantee of theFederal Republic of Nigeria for the equivalent of US100 million to helpfinance a power transmission and distribution project. The loan would havea term of 20 years, including 5 years of grace, with interest at 11.6 percentper annum. NEPA would carry the foreign exchange risk.
PART I - THE ECONOMY 1/
2. The last Country Economic Memorandum reviewing short-term develop-ments in Nigeria (Report 3232-UNI) is dated April 7, 1981. A Basic EconomicReport examining the long-term economic prospects and policy options facingNigeria (Report 3341-UNI), dated August 17, 1981, has also been distribute'dto the Executive Directors. Country data are attached as Annex I.
Political Background
3. The present civilian Government, headed by President Alhaji SnehuShagari, assumed office on October 1, 1979, following 13 years of militaryrule. The Government's priorities and policies are set out in the recentlyissued Outline of the Fourth National Development Plan (1981-85). Ruraldevelopment, increased food production, education, and low-cost housing arefocal points of the new administration's program. The desire for decent-ralization, and the fact that opposition parties hold office in many states,constitute a formidable challenge for the Nigerian leadership in successfullyimplementing a national development strategy.
Recent Economic Developments
4. Although oil output rose rapidly in the early 1970s, reaching a peakof 2.3 million barrels a day (mbd) in 1974, it was only with the quadruplingof the oil price in 1973-74 that Nigeria's financial situation changed funda-mentally. The dramatic rise in the oil income occurred at a time when Nigeriaranked among the world's poorest countries and had a predominantly agriculturaleconomy, with manufacturing accounting for less than 10 percent of G(DP.
1/ This section is substantially unchanged from the President's 1{eportfor the Anambra Water Supply and Sanitation Project approved by the Boardon July 7, 1981.
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5. The Government's first concern, as reflected in the Third NationalDevelopment Plan (1975-80), was to use the new wealth to modernize the country.The four-fold increase in public revenue allowed initiation of a vast investmentprogram, and generated a growth rate of 7 percent a year. Public investmentwas concentrated on developing transport and communication networks, expandingeducation, and setting up heavy industry. But the large public expendituresalso caused high rates of inflation in the early years and wastage of resources.In fact, expenditures rose much faster than income, and within two yearsdeficits reappeared on both the budget and the balance of payments. Thesedevelopments brought the country to the brink of a financial crisis in 1978.
6. With the successive increases in the oil price over the past twoyears - from US$14 to US$39 per barrel - Migerias financial position has onceagain greatly improved. In 1980, export earnings and government revenue areestimated at about 2-1/2 times the level in 1978. Federal Government expendi-tures in the budgets of 1980 and 1981 have been allowed to rise roughly inline with the increase in revenue. The composition of capital ex?endituresproposed for 1980 and 1981 reflects the new Government's increasing emphasison agriculture, housing, waiter supply, and road maintenance. However, inmid-1981, Nigeria's oil exports fell dramatically as the result of a glut inthe world oil market and the Government was obliged to take corrective priceaction in an effort to recuperate previous export volumes. Although the glutmay prove to be temporary it underscores once again the fragile financialbasis of the Fourth Development Plan.
7. Nigeria's pattern of economic growth over the past few years hasdisplayed many of the characteristics associated with the development of otheroil exporting countries. High rates of domestic inflation, combined with anappreciating value of the naira, meant that domestic costs of production roserelatively to foreign costs. At the same time, costs in such purely domesticsectors as construction and services (where supplies could not be augmentedthrough imports) rose at a more rapid pace than costs in the tradeable sectors.Consequently, agriculture and manufacturing were placed at a disadvantagevis-a-vis both foreign produced goods (which became relatively cheaper) andpurely domestic sectors (which became more profitable). In the agriculturalsector, the output of subsistence crops as well as traditional export cropsstagnated. The manufacturing sector too found it difficult to compete withimports, despite extensive government incentives, and suffered from risingcosts and infrastructure bottlenecks.
Poverty and Basic Needs
8. Nigeria has an estimated population of 83 million (1979) and a percapita income of about US$670. Although Nigeria is placed among the middle-income countries, acute poverty is still widespread. In 1978, an estimated 35percent of the households in the urban areas and 55 percent in the rural areaswere unable to meet the minimum expenditure required for food and othernecessities of life. A substantial portion--20 percent of all households inurban areas and 40 percent in rural areas--did not have incomes adequate tomeet even basic food requirements.
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9. In terms of such health indicators as infant mortality, life expec-tancy, and incidence of disea.ise, Nigeria is not much better than the Doorestcountries in Africa. Infant mortality is believed to be well over 100 perthousand, and life expectancy still under 50 years. This is in spite of asubstantial rise in the number of doctors, nurses, and hospitals in relationto Nigeria-s population. Reduction of mortality in Nigeria, as in other coun-tries experiencing rapid rises in income, will be a slow process, requiringthe spread of an effective primary health care system and progress on a rangeof related socio-economic factors, particularly nutrition, primary education,and water supply.
10. Nigeria has, however, taken big strides in human resource develop-ment through the Government-s firm commitment to universal primary education(UPE). As a result, some 60 percent of all school age children are nowenrolled, and in several parts of the south, UPE is already a reality. Thepace at which the program was pursued inevitably created problems, e.g. lackof trained teachers, deterioration in the quality of education, diversion oflabor from agriculture, and a rising demand for secondary education. Butthese initial troubles are likely to ease when the rate of expansion stabi-lizes. Within the next two decades Nigeria should be transformed from acountry with very high rates of illiteracy to one where most of the populationhas been to school.
11. Although there was little increase in agricultural output duringmost of the 1970s, off-farm rural activity expanded considerably, mostly frompublic expenditures on construction following the oil boom. Rural incomeswere also augmented by the rapid growth in the service sectors and a probableincrease in remittances from urban areas. The growth in incomes appears tohave been spread widely and to have relieved the rural poverty somewhat.
12. In urban areas, formal sector employment rose rapidly, perhapsaround 8 percent a year in the 1970s. But real wages appear not to haverisen over the last 15 years. In 1975, there was a substantial increase inpublic sector wages, promptly followed by an increase in the private sector.But this gain was quickly eroded by the ensuing high inflation and theGovernment's restraint on further wage increases as part of its policy tocontrol inflation. However, recently the Government, under union laborpressure, raised the minimum wage from N1Q0 to N125 per month, bringing itin real terms to the level of 1970. Average real wage earnings appear to haverisen as a result of the distribution of employment moving towards the higherpaying sectors. Furthermore, since formal sector employment rose in relativeterms, an increasing proportion of the labor force came to enjoy a higherstandard of living. Although the relative size of the informal sector appearsto have declined slightly over the past decade, it still is the dominant modeof employment in urban areas. Because of the rapid expansion in construction,trade and commerce, the income earning possibilities in this sector remainedgenerally good, and average real incomes at the lower end of the scale pro-bably remained stable, or even improved slightly.
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Economic Prospects
13. As the major source of public revenue and foreign exchange earnings,oil is basic to an assessment of Nigeria's long-term economic prospects. Onpresent knowledge, Nigeria's oil output over the next decade is not expectedto 1- sustained above the average of 2.15 mbd; by 1990 it may even begin todecline. With domestic consumption of oil products rising rapidly (over 15percent a year), the exportable surplus is expected to decline from thecurrent rate of over 90 percent of output to about 70 percent by 1990.Thus, if past trends persist, and no new sources of export earnings and publicrevenue are developed to make up for the relative decline of the oil sector,Nigeria's balance of payments and fiscal situation can be expected to tightenover time. Even with a relatively moderate rise in imports, large currentaccount deficits can be expected to reappear towards the end of the 1980s,leading to a deterioration in the balance of payments in the 1990s, whenmaintenance of steady economic growth will become increasingly difficult.Budgetary deficits could appear even sooner, threatening domestic economicstability. Future dramatic increases in the oil price may postpone thefinancial difficulties, but this is a risky basis for formulating a long-termgrowth strategy.
14. In order that dependence on imports may decline and non-oil exportsmay gradually begin to replace oil exports, projections suggest that Nigeriahas roughly ten years to make the necessary structural adjustments. Accelera-ting growth in agriculture and industry will be the most difficult task. Thegrowth of the other sectors of the economy, such as power, transport, andconstruction, should receive its impulse primarily from commodity production.The expected rapid increase in population and labor force (estimated at over 3percent a year) necessitates maintaining a fairly high rate of economic growthover the next two decades.
15. The Government of Nigeria is committed to achieving a balanced andsustainable economic growth path. The Outline of the Fourth National Develop-ment Plan indicates that, while the unfinished projects from the Third Planperiod would be speedily completed, greater emphasis will be placed on sti-mulating agricultural production. A target of food self-sufficiency by 1985has been set. While the target is ambitious, and may not be achieved withinthe plan period, it is indicative of the high priority that is being attachedto this sector. There is likely to be strong emphasis again on education, asin the past, but the expected inclusion of a large low-cost housing programwould be a new departure. Given the great improvement in Nigeria's financialprospects, and assuming an active private sector, domestic investment isexpected to be maintained at a high level. This should permit the economy togrow at around 5 percent a year--more than 6 percent for non-oil GDP--withfair potential for employment generation.
-5-
16. The availability of skilled manpower will remain a major constrainton economic development over the coming years. Although the Government hasgiven high priority to manpower development, there are still severe shortagesin several lines of activity. The dependence on expatriates is particularlyhigh in scientific and technical occupations. The demand for middle-levelskills is expected to rise rapidly with an increasing emphasis in governmentprograms on poverty alleviation, education, and preventive nealth. In theshort-term, expatriates may alleviate some of these shortages, but ultimatelythe solution lies in improviag the quality and coverage of education andexpansion of pre-service and in-service training programs.
External Borrowing and Creditworthiness
17. Total debt outstanding (including undisbursed) amounted to US$7billion at the end of 1980. A limited amount of borrowing on commercial termsis expected to continue. However, by the mid-1980s, when the debt service oncurrently contracted loans will peak, payments will still amount to no morethan 5 percent of export earniags. The World Bank's share in total debtoutstanding amounts to about 15 percent. Given the relatively low level ofexternal indebtedness, the Government's generally cautious approach to externalborrowing, and the favorable prospects for oil, the debt service is liKely toremain around 5 percent through 1990. Under the circumstances, Nigeria iscreditworthy for considerable Bank lending.
PART II - BANK GROUP OPERATIONS IN NIGERIA 1/
18. Bank and IDA lending to Nigeria as of September 30, l961 amounted toUS$1,796.5 million (net of cancellations). The amount of these loans andcredits disbursed as of Septem'ber 30, 1981 was US$764.5 million, leaving anundisbursed balance of US$1,032.0 million. Transport, power and water supplytogether account for about 43 percent of total commitments; agriculture foranother 43 percent (most of which was committed in the last seven fiscalyears); and education, industry, urban and the post-war rehabilitation loanfor the remaining 14 percent of total commitments. Gross disbursements inFY80 were about US$55 million, and US$73 million in FY81, but are expected toincrease in the coming years in line with the expansion of Bank lending toNigeria There have been only two IDA credits to Nigeria, for 0835.3 mil-lion; both are fully disbursed. IFC has made five loans to borrowers total-ling US$17.3 million, and six equity investments totalling US$5.l million. Ofthese amounts, US$5.4 million have been repaid, cancelled, or sold. Annex IIcontains a summary statement of Bank loans, IDA credits, and IEC investments,as well as notes on the execution of ongoing projects.
1/ This section is substantially unchanged from the President's Reportfor the Anambra Water Supply and Sanitation Project approved by the boardon July 7, 1981.
- 6 -
19. The main thrust of the Bank's activities in Nigeria in recent years
has been to support agriculture and rural development, with particular em-
phasis on institution-building and transfer of technology. These objectives
are in consonance with the Federal Government's priorities under the Third
Plan, which places considerable emphasis on agriculture, and its policy to use
the proceeds of Nigeria's oil revenues to increase the productive capacity of
the economy, and thereby raise the standard of living of its population,
particularly the rural poor.
20. In view of the interest which Nigeria has expressed in greater
Bank involvement, an expanded Bank lending program has been initiated.in developing a broader approach to lending in Nigeria, a central objective
is to encourage the shift (already discernable in the Federal Government's
investment programming) away from the massive and diffused infrastructure
investment, which characterized the two or three years following the oil
boom of 1973/74, towards a more discriminating support for growth in the
commodity producing sectors. A second objective of Bank lending is to raise
the productivity of the lowest income groups and thereby diminish the inci-
dence of absolute poverty in Nigeria. This objective has been actively
pursued in recent agricultural projects, including the Bauchi State and Kano
Agricultural Development Projects approved by the Executive Directors on April
30, 1981, which benefit some of the very lowest income groups. Agricultural
lending of this kind would continue to figure prominently in the future
lending program. A third objective of Bank lenuing is to support the Federal
Government's efforts to diversify the economy, and reduce the excessive
dependence upon petroleum as a source of foreign exchange and fiscal revenue.
Agricultural lending, in particular, would include strengthening the poten-
tial for export crops.
21. In accordance with these objectives, projects in both agriculture
and industry together should account for a large share of Bank lending in the
coming two or three years. Effective support for the commodity producing
sectors will also require strategic investment in production-related infra-
structure, however. There would appear to be good opportunities for the
Bank to make a significant contribution in power, water supply, and highway
maintenance. Further project identification work is under way in these
sectors. Similarly, there is a strong case for continued lending for
education. In this context, it is proposed that vocational, technical, and
teacher training be given special emphasis. Finally, the Bank would support
the Federal and state governments' efforts to spread the benefits of growth to
the social sectors. It is envisaged that some of the pressing problems of
rapid urbanization will continue to be addressed through a number of urban
development projects, along the lines of the ongoing project in Bauchi State,
focussed on the needs of the urban poor. The Bank is also considering a
request from the Federal Governmert to assist in overcoming the country's
health problems. A sectoral distribution of lending along these lines would
be in keeping with the need to generate employment, and would also support
the Federal Government's aim of mobilizing Nigeria's petroleum revenues to
alleviate poverty and improve the overall distribution of income.
PART III THE POWER SECTOR
The Overall Energy Context
22. Nigeria, the major energy exporting country in Africa south of theSahara, is well endowed with a broad range of energy resources among whichpetroleum and natural gas figure most prominently. Proven reserves ofpetroleum amount to 2.8 billion tons and this would suffice to maintainproduction at a daily level of 2.2 million barrels for a period of 20 years orso. Associated with the production of petroleum, some 20 billion cubic metersof gas are produced each year. Plans to harness this associated gas have beenslow to materialize so that by 1978 only 6 percent was utilized and the restflared. However, the Government, with Bank assistance, has been evaluatingproposals for piping associated gas to the Lagos area where it would be usedfor power generation and other industrial purposes. A pipeline project ofthis nature would utilize about thirty percent of the gas now being flared.Plans are also under way for a number of projects based upon the large reservesof both associated and non-associated gas that are estimated at 2.7 billiontons of fuel oil equivalent (t.o.e.). Amongst these plans, the production ofLNG is particularly important and a first project of this kind is already inan advanced stage of preparation.
23. In addition to petroleum and natural gas, Nigeria has other fossilfuel resources in the form of coal. Known recoverable reserves are estimatedat 230 million tons of bituminous coal and 24 million tons of lignite, It isthought that there may be a further several hundred million tons of undis-covered resources but their presence still has to be established. Coalproduction now averages some 200,000 tons per annum and a recent expansion ofmining capacity raises the prospect that production may rise once again tothe peak of almost 1 million tons that was attained in 1958 when both NEPAand and rail transport were important consumers of coal. Other less conven-tional hydrocarbon resources such as tar sands and gas hydrates are known toexist but they have been little explored and their production potential isuncertain.
24. Nigeria's endowment of hydraulic resources, on the other hand, havebeen well defined and although on a per-capita basis they appear to be slightlybelow the world average they are nevertheless significant. As of 1980, thepotential economically feasible instalable capacity was estimated at 4,500 MWof hydro-power compared with only 760 MW presently utilized and a further1,140 MW to be commissioned by 1984.
25. As a basis for the systematic development of these diverse sourcesof energy the Federal Government commissioned a study to evaluate the overallenergy situation in Nigeria and to identify policy options. This study, whichis to provide a framework for the design of energy policies within the contextof a Fourth Development Plan, was completed by March 1980. Although the studyfalls short of providing a comprehensive assessment of alternative energysources, it nevertheless provides a valuable overview of the situationby assembling a wealth of diverse data concerning known resources and bypointing out the extremely promising prospects for solar energy -- a sourcethat had previously received scant attention.
- 8 -
26. In September 1979, a move was made to establish a framework forcomprehensive energy planning with the creation of an Energy Commission tocoordinate national energy policies. A change of government took placeshortly tLereafter and the Commission has been slow to assume its respon-sibilities. Nevertheless, the incoming administration demonstrated itsinterest in comprehensive energy planning by appointing a special energyadvisor to the President. The office of energy advisor provides, for thefirst time, a link between the activities of numerous public agencies suchas NEPA, the Nigerian National Petroleum Corporation and the Nigerian CoalCorporation that have traditionally functioned in an independent fashion, eachwith its own limited operational and sectoral focus. It has become a focalpoint for assessing major project proposals such as an LNG facility and agas-pipeline from the Niger Delta to Lagos. The Bank is encouraging theNigerian authorities to view these projects within the context of an overallnational energy policy and has indicated readiness to provide technicalassistance in these matters.
The Power Sector
27. Electric power accounted for 12 percent of total energy consumptionin Nigeria (estimated at upwards of 15 million t.o.e. in 1978) and about 22percent of commercial energy consumption. Most of the public electricitysupply is generated and distributed by NEPA, although a smiall proportion isprovided by the States e4ther from their own generating facilities or by wayof purchasing power from NEPA. Private power generation for both industrialand residential use has grown significantly, particularly during 1977-78 whenthe public supply was prone to f-r^equent interruptions.
28. NEPA, a semi-autonomous public corporation operating under theoverall responsibility of the Federal Ministry of Mines and Power, wasestablished in 1972 by a merger of the former Electricity Corporation ofNigeria (ECN) and the Niger Dams Authority (NDA). The major policy orienta-tion of NPA's activities is controlled by a Board of Directors consisting ofthree appointees of the Ministry of Mines and Power, five senior officials ofrelated Federal Ministries and the General Manager of NEPA. Responsibilityfor day-to-day operations lies with the General Manager himself along with sixAssistant General Managers in charge of engineering, operations, distribution,commercial activities, finance and administration respectively.
29. The organizational structure of NEPA seems appropriate to thescale and dispersion of its operations. The construction and operation ofmajor generation and transmission projects is administered directly fromheadqr-arters in Lagos where all senior management functions are concentrated.By way of contrast, the planning, design and construction of distributionsystems of less than 33 KV are handled at the local level by 20 districtoffices each of which has its own district manager and complement of engineers,commercial staff and accountants. District offices are also responsible formetering, billing and other customer related activities.
- 9-
Acting as a link between headquarters staff and the districts, there are fourregional offices -- one serving the Lagos metropolitan area and one each for
the northern, eastern and western regions. Assigned to the regional offices
are specialized technical staff that are made available to supplement the
skills of district level staff as needed.
The facilities of NEPA: present and planned
30. The generating capacity at present available to NEPA amounts to
some 1,600 MW. Almost half of this capacity comes from the 760 MW hydro plant
at Kainji -- by far the largest single facility in Nigeria. Steam and gas
turbines at five thermal stations account for a further 830 MW. The small
remainder of available capacity relates to a number of minor diesel stations.
Generating plants are connected to the main load centers through 3,440 circuit-
km of 330 kv transmission lines feeding into 3,800 circuit-km of 132 kv trans-
mission lines through 8 main step-down stations. Some 60 sub-stations link
this principal transmission system with the distribution network.
31. Although available capacity is sufficient to meet peak demand, there
have been power shortages from time to time. In the three years prior to
1980, a deficit of hydro-energy was caused by adverse hydrological conditions
affecting the flow of the Niger River into the Kainji Reservoir. A recurrence
of such exceptional hydrological conditions is unlikely and would probably.
not result in overall power shortages because additional thermal capacity has
since been installed. However, technical problems with the transmission and
distribution systems are a continuing cause of unscheduled interruptions in
supply.
32. Recently, NEPA has been concerned both to increase its generating
capacity in anticipation of demand which is rising at the very rapid rate of
20 percent a year, and also to strengthen its system of transmission and
distribution. A number of new generation plants are being built including
a thermal plant at Igbin in the Lagos metropolitan area with an installed
capacity of 200 MW for the first stage rising to as much as 1,200 MW by
1985. Transmission facilities linking the Igbin station to the national
transmission grid would be provided under the proposed project. NEPA has
already embarked upon a program of distribution expansion in Lagos with a view
to overcoming supply constraints in the metropolitan area -- a major growth
pole for industry in Nigeria. The Bank extended financial support for this
undertaking within the context of a fifth power project (Loan 1766-UNI). To
complement investment in distribution for Lago3, the proposed project will
expand distribution facilities in 23 other cities and towns throughout
Nigeria, thereby contributing to a balanced dispersion of economic growth.
33. The works currently under construction form part of an ambitious
but carefully prepared ten-year development program for the period 1977-1986.
A recent revision of that program provides for a further net expansion ofinstalled capacity amounting to some 4,000 MW by 1986. The project basis
has already been developed for 3,400 MW of additional capacity but project
specific proposals have yet to be identified for a further 600 MW.
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34. In 1979 a detailed feasibility study was completed for a hydro-project to be located at Lokoja just south of the Niger-Benue River confluencewhich could provide an initial 1,000 MW of capacity and an ultimate capacityof 1,800 MW. However, the government has hesitated to accept the proposalbecause of the large resettlement problem that would arise with the displace-ment of an estimated 270,000 people by flooding.
35. Several options confront NEPA in investigating the possibility ofalternative projects to substitute for Lokoja. The choice lies between otherhydro projects and/or more thermal projects which, in turn, may be based upongas, oil, coal or refinery residuals. A firm decision between these alterna-tives must be made within the next year or so if a further incremental 600 MWof capacity is to be on stream by 1986. This underscores the urgent need toupdate the master plan for power development with a view to defining prioritieson the basis of sound comparative cost data that reflects the opportunity costto the Nation of alternative energy sources.
Bank role
36. Since 1964 the Bank has made five loans for power development inNigeria, amounting to a total of US$316.8 million. The first of these loans(372-UNI) was made to the ECN in 1964 for transmission and distributionfacilities in Lagos, Ibadan and Port Harcourt. The project was completedin time and within the appraised cost estimates. A second loan (383-UNI)was made to NDA also in 1964 to assist in financing the construction of ahydro-electric scheme at Kainji. This project was subject to substantialcost overruns which reflected, in part, an underestimation at the time ofappraisal of both the volume of civil works and the cost of equipment.Another contributary cause of the cost of overruns, however, was the disrup-tion in scheduling which resulted from civil war. A supplementary loan(572-UNI) was provided in 1968 to help cover the additional foreign exchangecost, thereby enabling the project to be completed in 1970 -- only one yearbehind schedule. Since the merger of ECN and NDA, two loans have been madeto NEPA. The first (Loan 847-UNI of 1972) was to assist in financing theinstallation of additional generating capacity at Kainji together with asecond transmission line to Lagos. The project was completed two years behindschedule due, in part, to delays in the delivery of equipment because of portcongestion in Lagos. The delay in project execution resulted in cost overrunsof some 40 percent. In 1979 another loan was made to NEPA (1766-UNI) insupport of distribution expansion in the Lagos metropolitan area.
37. An association with the power sector over seventeen years hasenabled the Bank to contribute significantly to planning, operational effi-ciency and institutional development. With the objective of encouraging theoptimal deployment of scarce managerial and technical resources, the Bankencouraged the unification of all power sector functions under the umbrellaof a single federal agency. With the establishment of NEPA in 1972 both theBank and the Government were able to focus their institution building effortsin a more concentrated manner. Subsequently, Bank assistance also madepossible the preparation of a first nationwide integrated power development
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program and, in 1979, when the prospect was raised that some of NEPA's respon-sibilities may be delegated to state governments, the Bank once again counseledsuccessfully in favor of a unified structure.
38. In recent years the managerial and organizational resources ofNEPA have been taxed to their utmost by an exceptionally strong growth in thedemand for power that has averaged 20 percent a year. Demand is projectedto continue growing at a similar pace during the next several years and theproblems inherent in satisfying this demand are likely to persist. At theroot of these problems is a severe shortage of skilled manpower. The Bankhas assisted NEPA to ameliorate this constraint by helping to finance theestablishment of a major training program. The proposed project would furtherstrengthen this effort. In addition, following upon discussions with the Bankon ways to supplement its manpower resources, NEPA contracted outside servicesto perform such routine tasks as the repair of vehicles and standard equipment.
39. The Bank has long recognized the central importance to NEPA of astrong and independent financial structure and Bank involvement in the powersector has been instrumental in securing the adoption of an eight percent rateof return on revalued assets as NEPA's explicit medium-term financial goal.Tariffs were raised by 30 percent in 1977 and a further 50 percent in 1979,thereby contributing significantly to the attainment of financial targets.
40. The financial, organizational and staffing problems with whichNEPA must cope are deep-seated and will not yield easily to short-term solu-tions. It is only by a continuous association with NEPA over the long-termthat the Bank can provide effective support for the development of soundsector policies and appropriate institutional changes designed to resolvesector problems. The policy issues that we propose to address in continuingto lend for power are commonplace amongst power companies the world over, butparticularly difficult to resolve in the Nigerian context where a 20 percentannual growth in electricity consumption places exceptional demands upon NEPAover and above those normally encountered elsewhere. Overall sector planningwill continue to be a focus of attention in the dialogue between the Bankand NEPA. Staff training and cost recovery will also continue to figureprominently in the dialogue.
PART IV - THE PROJECT
41. The proposed project constitutes part of the ten-year expansionprogram of NEPA for the period 1977-1986. It was identified in March 1978during the course of preparing a fifth Bank-supported power project (Loan1766-UNI). In mid-1978 NEPA engaged consultants to carry out a feasibilitystudy under terms of reference agreed with the Bank. On the basis of a draftfeasibility report that was submitted for review in May 1979 the project wasappraised in October of that year. A staff appraisal report (No. 3041-UNI,dated October 6, 1981) is being circulated to the Executive Directorsseparately. Negotiations were held in May 1981 in Washington. Supple-mentary data on the project is to be found in Annex III.
- 12 -
42. From its very inception the proposed project was viewed as com-plementing the fifth power project by expanding distribution facilities in23 cities and towns throughout Nigeria -- thereby providing a balance to theprevious focus on metropolitan Lagos. Yet another link to the fifth projectis the interconnection that would be constructed from the Igbin thermalgenerating station (which is about to be built near Lagos) to the Lagosdistribution system as well as to the national high voltage network.
43. A central objective of the project would be to assist in meetingthe rapidly increasing demand for electric power and, in particular, toestablish facilities for power distribution consistent with a balanced disper-sion of economic growth throughout the country. At the same time the Bankwould sustain and strengthen its efforts to assist NEPA introduce appropriatepolicy and institutional reforms in areas critical to operational efficiency.
Project description
44. The power distribution system would be expanded in the following23 cities and towns of which 18 are state capitals.
Aba Enugu Maiduguri Port HarcourtAbeokuta Ibadan Makurdi SokotoAkure Ilorin Minna WarriBauchi Jos Onitsha YolaBenin Kaduna Oshogbo ZariaCalabar Kano Owerri
Power consumption in these cities and towns is expected to grow at an averageannual rate of 12 percent although some of the smaller towns (such as Bauchi,Makurdi and Yola) may exhibit much higher growth. A comprehensive programof transmission and distribution has been developed to meet the projectedincrease in demand and the proposed project would focus specifically on thoseaspects of the program that relate to the high tension systems. Under theprojcct, 321 circuit-Km of 132 KV and 33 KV transmission lines would beinstalled as well as 1,875 MVA of substation transformer capacity. The lowtension distribution facilities that would be needed to complement theseproposed project investments would be furnished by NEPA as part of its routinecapital program.
45. A distinct and separate component of the project would be to connectthe Igbin thermal power station scheduled for construction soon in the Lagosarea with the national transmission network through 50 Km of double circuit330 KV transmission lines. A further 49 Km of double circuit transmissionlines would connect the generating facility with the high voltage n;2twork ofthe Lagos metropolitan area, thereby providing additional support to thedistribution system currently being expanded with Bank participation throughLoan 1766-UNI. In conjunction with these transmission lines, provision hasbeen made for some 1,320 MVA of transformer capacity to be installed at thecorresponding substation terminals.
- 13 -
46. The project would also provide for 15U man uaontris of consultantservices to continue the training program begun under the tiftn bank-support6apower project (Loan 1766-UNI). A further 3U man monthls of snort term con-sultancy would be provided to undertaKe studies aimed at irncreasirng the opera-tional efficiency of NEPA and encoumpassing, i) the preparation of a completionreport for the fourth Bank-supported power project (Loan 647-UNI) that wascompleted in June 1980, ii) a review of billing and collection systems andiii) an updating of the power development master plan that was financed somesix years ago under Loan 847-UNI.
Project Implementation
47 The project would be implemented by NEPA over a period of about fiveyears. The design and supervision of work relating to the Igbin interconnec-tion has already been contracted to consultants. Bids tor the construction otlines and substations relating to this project compornent have been receivedand evaluated by NEPA to the satisfaction of the Bank. Consultants have alsobeen appointed for the preparation of bidding documenits ana subsequent super-vision of distribution facilities in 23 cities.
48. NEPA has many years of experience in the planning and executionof both generation and transmission projects so that tthe successful imple-mentation of the proposed project should pose no special proolems. Primaryresponsibility for project planning and execution would lie with staft tromNEPA headquarters. Close liaison would need to oe estaDlishea Detween nead-quarters staff and the district offices responsible for linKing discrioutionfacilities to the high tension transmission system. The existing trameworK otcommunication between headquarters and districts appears adequate to thandlethis task. Experience with previous bank projects indicates, nowever, tnatexpeditious project implementation will De contingent upon a sustained eitortto overcome the institutional shortcomings of NEPA that, in large part, stemfrom a serious shortage of technical and professional statf throughout theorganization. In this respect, the institution builiing oojectives of theproposed project will have a direct bearing upon the efficient execution ofthe transmission and distribution components, as well as preparing the groundfor enhancing the overall efficiency of NEPA.
49. Global indicators of manpower efficiency point to a progressiveimprovement in the productivity of NEPA personnel during recent years. Tlheratio of consumers to employees rose from 31 in 1974 to 51 ill l979 and, overthe same period, sales per employee rose from 163,000 kWh to 25_,00U kWh.Recognizing its obligation to raise overall productivity still further NEPA,in the context of Loan 1766-UNI, agreed to aim at additional improvements inthe ratio of consumers to employees.
50. Notwithstanding the increase in productivity as measured by sucnglobal indicators, however, efficiency is still seriously impaired by per-sisting shortages of skilled manpower. To amaeliorate thils proDlem tihe riftnBank-supported power project included a training componenit tnat was nesignedto establish a permanent capability for the systematic identitication of
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manpower requirements and training needs. It also made provision for thefinance of training equipment and instructors. The proposed project wouldprovide for a continuation of this program by financing 150 man months ofshort-term consultant services at a cost of US$8,800 per man month. NEPAwould provide housing for these consultants. It would be a condition ofdisbursement against this category of project expenditure, that the trainingprogram financed under Loan 1766-UNI had been successfully implemented and the
corresponding loan amount fully disbursed. (see paragraph 4(b) of Schedule 1to Loan Agreement).
51. The management of NEPA has long been aware that a serious obstacleto the retention of qualified technical and professional staff is a salaryscale that is constrained by Federal Government pay guidelines. In thisrespect NEPA is placed at a considerable disadvantage in competing withprivate industry for qualified manpower resources. At the same time, themanagement has been equally conscious that a higher salary scale would not besufficient in itself to resolve NEPA's manpower problems because there is afundamental shortage of skilled manpower throughout the economy. The firstpriority, therefore, has been to establish a training program that willincrease the overall supply of those specialized skills needed by NEPA. Nowthat this program is operational under the direction of a full-time trainingmanager, it is appropriate that NEPA should turn its attention to establishinga salary scale that will permit it to retain technical manpower once trained.
NEPA has already commissioned a study on the structure and level of salariesthat will furnish a basis for discussions with the Federal Government relatingto the introduction of a competitive salary scale.
52. Although the primary focus of institution building is directedtowards the amelioration of manpower constraints, some significant organiza-tional innovations aimed at improving service reliability in general wouldbe introduced in parallel with the proposed project. With the objective ofreducing the incidence of unscheduled interruptions in power supply, it wasagreed during negotiations that NEPA would introduce a monitoring informnationsystem to permit the quantification of overall system performance and theidentification of frequent causes of power failures, concentrating on correc-tive action in the weaker areas of the supply system. The systems and distri-bution operating unit of NEPA would be strengthened so that it may manage thismonitoring information system effectively (see Section 4.03 of Loan Agreement).In conjunction with the introduction of an overall monitoring system, agreementwas also reached at negotiations that NEPA would undertake a special powerflow study of the proposed Igbin interconnection with the Lagos distributionsystem so as to ensure smooth operation under both normal and contingencyconditions (see Section 3.03 of Loan Agreement).
53. It is expected that the overall operational efficiency and finan-cial integrity of NEPA would be further strengthened by the recommendationsof studies to be financed by the proposed project (see para. 46 above).Consultants to undertake these studies would be employed with qualificationsand on terms and conditions acceptable to the Bank (see Section 3.02(a) of
- 15 -
Loan Agreement). The cost of these short-term consultant services is esti-mated at US$13,000 per man month. This relatively high cost is attributableto the high cost of hotel accommodation and subsistence in Lagos.
Project Cost
54. Total project cost is estimated at US$224.4 million (includingtaxes and duties of US$5.6 million), of which the foreign exchange componentwould amount to US$148.5 million or 68 percent. A breakdown of costs bymajor expenditure categories is presented in the loan and project summary.The construction of distribution facilities for 23 cities would account for63 percent of project cost and the interconnection of the Igbin thermalstation for a further 33 percent. The sum of US$9 million provided forconsultant services, training and studies would account for the remaining fourpercent of project cost.
55. Allowance has been made for physical contingencies equal to 10 per-cent of base costs for the distribution facilities to 23 cities. Taking dueaccount of the recent evaluation of bids for powerlines and sub-stations, a 5percent average allowance has been made for physical contingencies relating tothe Igbin interconnetion system. Price contingencies on base cQSts plusphysical contingencies have been estimated at a rate of 15 percent a year forlocal costs and at a rate declining from 9 percent in 1981 to 6 percent in1986 and beyond for foreign exchange costs. On this basis total contingenciesare estimated at 47 percent of base costs.
Project Finance
56. The proposed loan of US$100 million equivalent, to whigh theFederal Government would extend its guarantee, would finance 46 percent oftotal project cost net of taxes and would amount to 67 percent Q£ the foreignexchange cost. The remaining project cost of $124.4 million would be financedby NEPA through loans from the Federal Government or through internal cashgeneration. There are good prospects for NEPA being able to secure supplier'scredits on some of the imported equipment and this may reduce the need toborrow from the Federal Government. If so requested, the Bank stands ready toassist NEPA in seeking cofinancing for the proposed project.
Financial Performance and Cost Recovery
57. For many years following its establishment in 1972, the financialposition of NEPA was unsatisfactory. Electricity tariffs remained unchangeduntil 1977 and a 30 percent increase in October of that year was insufficientto compensate for the effects of a persistent domestic inflatiQg. An esti-mated revaluation of NEPA's assets over this period indicates that the finan-cial rate of return on revalued assets declined from some 4.4 percent in1972/3 to zero after 1974/5. In the absence of sufficient internallygenerated funds, NEPA was obliged to rely increasingly upon loans from theFederal Government to finance its investment program. The contribution ofNEPA itself to its own capital budget diminished from 84 percent in 1972/3 toonly 7 percent in 1977/8. As a result, NEPA's ratio of debt to equity, based
- 16 -
on an estimation of revalued assets, rose from 30/70 in 1972/3 to 45/55 in1977/8. There were only two factors to mitigate this otherwise disappointingfinancial performance. First, the debt/equity ratio of NEPA, although lessadvantageous than in 172, was still low enough to permit a good margin forfurther borrowing. Second, the Federal Government had furnished loans on easyterms at 5 percent interest and with a maturity of 25 years including fiveyears grace on both principal and interest.
58. A significant turn of events came about in August of 1979 whenthe Government approved a major increase in tariffs. The accounts for 1979/80revealed an effective average increase of 56 percent as well as a significantamelioration of the previously regressive tariff structure. Financial projec-tions indicate that the 1979 tariff adjustment, in conjunction with an in-crease in power sales consequent upon the commissioning of new generatingcapacity, could lead to a twofold increase in the revenues of NEPA by 1982.This would take NEPA a long way towards its goal of an 8 percent rate ofreturn on revalued assets -- a goal that was articulated in a covenant to theLoan Agreement of 1980 (Loan 1766-UNI) and is reaffirmed again within thecontext of the proposed loan (see Section 5.05(a) of the Loan Agreement). Toprepare the way for this further rationalization of tariffs, NEPA has engagedconsultants to carry out a study of tariffs based on marginal cost principleswith terms of reference determined in consultation with the Bank. Assuranceswere given during negotiations that the results of the study will be discussedwith the Bank and that further revisions will be made to the tariff structurein line with the recommendations of the study (see Section 5.05(b) of LoanAgreement).
59. The revenue position of NEPA is adversely affected also by arrearsin payment by many consumers. Bills outstanding amount to about US$170million -- equivalent to almost 7 months of invoicing. The normal cycle ofbilling and collection can account for no more than two months of this lag.NEPA continues in its efforts to speed up collection by reducing delays inbilling, improving its analysis of arrears and resorting increasingly to largescale disconnections. The proposed project would reinforce these efforts byfinancing a comprehensive study of the decentralized billing and collectionsystems with a view to making detailed recommendations for improvements.Consultants for this purpose would be engaged with qualifications and on termsacceptable to the Bank.
60. Assuming that the problem of customer arrears can be graduallyreduced in size and that appropriate tariff increases are introduced fromtime to time, it is projected that the net internal generation of funds byNEPA would amount to some US$3.4 billion for the five year period ending1985/6. This would finance about 36 percent of its total requirements forinvestment and working capital during the same period. In view of NEPA'sstill limited acquaintance with the international capital market, borrowingfrom abroad is likely to be modest in relation to the US$9.5 billion capitalprogram. Consequently, it may be anticipated that NEPA will call upon the
- 17 -
Federal Government to finance upwards of 60 percent of its capital budgetduring the next five years -- amounting to the equivalent of some US$5.8billion.
61. As long as NEPA continues to invest such massive amounts of capitalin expansion, there appears to be no realistic alternative to substantialfinancial support from the Federal Government. This, in turn, points tothe likelihood of a further increase in the debt/equity ratio although, evenif support from the Federal Government were exclusively in the form of loanswithout any further equity contributions, the detrimental effect of a risingdebt/equity ratio would be mitigated by the process of inflation. Thesheer size of NEPA's investment program clearly calls for careful financialplanning on the part of the Nigerian authorities. Agreement was reachedduring negotiations that the Federal Government would undertake to formulateproposals for meeting NEPA's investment needs and to discuss them from timeto time with the Bank (see Section 3.04 of Guarantee Agreement). In theirdialogue, the Bank and the Federal Government would continue to addressthemselves primarily to the question of adequate cash generation by NEPA.They would also seek to strengthen NEPA's financial position with a view toenabling it, in the long run, to borrow more extensively in the internationalcapital markets.
62. Recognizing the need to control its overall level of borrowing NEPAsubscribes to the principle that net revenues in any year should be at least1.5 times greater than the debt service required for the succeeding year.During negotiations, assurances were obtained that NEPA would seek the agree-ment of the Bank before incurring any additional debt in the event that theratio of net revenues to debt service were to fall below 1.5 (see Section 5.07of Loan Agreement). Provided tariffs are increased as appropriate thisfinancial guideline is not expected to preclude NEPA from raising sufficientcapital for the remainder of its ten-year development program.
Procurement
63. All goods, civil works and services financed by the Bank wouldbe procured through international competitive bidding in accordance withBank guidelines. Foreign companies desiring to tender for project executionwould be exempt from legislation requiring them to incorporate as Nigeriancompanies. The Nigerian authorities agreed to this exemption at the time ofnegotiating Loan 1766-UNI and agreed further that the exemption should applyequally to the procurement of all goods, civil works and services financed bythe Bank under any other loan. As a general rule, procurement contracts wouldprovide for the training of Nigerian staff as appropriate, thereby fosteringthe Federal Government's objective of accelerating the transfer of technology.
64. For the high voltage transmission lines (estimated to cost US$53.1million), NEPA would continue the standard practice of design, supply anderection contracts. In the case of substations the following contract pack-ages would be procured separately: (i) power transformers; (ii) design, supplyand erection of structures, switchgear, control and protection equipment and(iii) civil works (mainly buildings). The aggregate value of these contract
- 18 -
packages has been estimated at US$147.4 million. For purposes of bid evalua-tion domestically manufactured equipment, such as electrical conductors, wouldbe allowed a 15 percent preference or the applicable import duty, whichever islower. However, on the basis of past experience it is expected that almostall contracts will be awarded to foreign suppliers. Consultant services forthe training of specialists, other short term consultants and studies, valuedin the aggregate at US$9.0 million, would be contracted on terms and conditionsacceptable to the Bank.
Disbursement
65. The proposed loan would be disbursed over a period of five yearsfrom 1983-87. For all equipment and civil works contracts, disbursement wouldbe made against appropriate documentation for 60 percent of foreign expendi-tures or 60 percent of the ex-factory price of locally manufactured goods.The aggregate amount of these disbursements is estimated at US$77.4 million.In the case of consultant services, including services for design and super-vision, staff training and studies, disbursement would be made against 100percent of foreign expenditures up to an estimated maximum of US$12.7 million.It would be a condition for the disbursement of loan funds for staff training,that the training program initiated under Loan 1766-UNI had been successfullyimplemented and fully disbursed. A provision for US$10 million has been madeon an unallocated basis.
Economic Justification
66. In the process of project preparation a systematic approach wasadopted for each of the twenty three cities concerned. Design standardswere optimized with respect to demand projections and consideration was givento several different possibilities for meeting the growth in demand overthe coming years before the least cost solutions were identified and selected.Similarly, in the case of the Igbin interconnection, the least cost solutionof several alternatives was adopted giving due weight to the need for a systemthat would reduce the likelihood of power failures to within reasonable bounds.
67. Insomuch as the Igbin interconnection constitutes onLy one partof a much larger generation, transmission and distribution project, it doesnot lend itself to an economic rate of return calculation. In the case ofthe expansion program to serve the incremental demand in 23 cities, however,the economic rate of return has been estimated at 17.5 percent. This figuremay be on the low side because it does not take account of the consumersurplus that may come about as a result of the project. Nor does it capturethe indirect benefits that may result from a better dispersion of economicactivity throughout the country as a result of the proposed project. Ifproject costs were to be 10 percent higher than expected and revenues lowerthan expected by a factor of 15 percent, the corresponding rate of returnwould be 13 percent.
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Project Risks
68. There are no unusual risks foreseen in implementing the project.Experience shows, however, that the severe shortage of technica.' and pro-fessional expertise with which tMEPA is confronted may erode its overall levelof organizational efficiency and this, in turn, may affect the project in-directly. A sustained effort in staff training and continue6i heavy relianceupon expatriate technical personnel in the medium-term future should keepthis risk within reasonable limits.
PART V - LEGAL INSTRUMENTS AND AUTHORITY
69. The draft Loan Agreement between the Bank and the National ElectricPower Authority, the draft Guarantee Agreement between the Federal Kepublic ofNigeria and the Bank, and the Report of the Committee provided for in ArticleIII, Section f (iii) of the Articles of Agreement are being distributed to theExecutive Directors separately.
70. Special conditions of the proposed loan are listed in Section Iliof Annex III of this Report.
71. I am satisfied that the proposed loan would comply witn the Articlesof Agreement of the Bank.
PART VI - kECOMM1ENDATION
72. I recommend that the Executive Directors approve the proposed loan.
A. W. ClausenPresident
AttachmentsWashington D.C.December 11, 1981
ANNEX IPage 1 of 5
NIGERIA - SOCIAL INDICATORS DATA SHEET
NIGERIA REFERENCE GROUPS (WEIGHTED AVE5AGESLAND AREA (TtlUUSAND SQ. KM.) - MOST RECENT ESTIMATE)-TUTAL 923.8 MUST RECENT MIDDLE INCOME MIDDLE INCOMEAGRICULTURAL 448.4 1960 /b 1970 Lb ESTIMATE Lb AFRICA SOUTH OF SAHARA LATIN AMERICA & CARIBBEAN
GNP PER CAPITA (US§) 160.0 250.0 670.0 794.2 1616.2
ENERGY CUNSUMPTIUN PER CAPITA(KILOGRAMS UF CUAL EQUIVALENT) 28.8 48.2 83.0 707.5 1324.1
PUPULA1'IUN AND VITAL STATISTICSPuPULAtIUN, MID-YEAR (TIIUUSANDS) 51598.0 66182.0 82603.0URBAN PUPULATIUN (PERCENT OF TOTAL) 13.1 16.4 20.0 27.7 64.2
PUPULATIUN PRUJECTIUNSPOPULATIUN IN YEAR 200U (MILLIONS) 161.3STATIONARY POPULATIUN (MILLIONS) 459.0YEAR STATIONARY PUPULATION IS REACHED 2105
PUPULATIUN DENSITYPER SQ. K11. 55.9 71.6 89.4 55.0 34.3PER SQ. KM. AGRICULTURAL LAND 125.0 152.0 179.7 130.7 94.5
PUPULATIUN AGE STRUCTURE (PERCENT)U-14 YRS. 45.4 46.6 47.6 46.0 40.7
15-U4 YRS. 52.3 51.0 50.0 51.2 55.365 YRS. AND ABUVE 2.3 2.4 2.4 2.8 4.0
PUPULATION GROWTH RATE (PERCENT)TOIAL 2.4 2.5 2.5 2.8 2.4URBAN 4.7 4.7 4.7 5.1 3.7
CRUDE BIRTH RATE (PER THOUSAND) 51.9 50.6 49.7 46.9 31.4LRUDE DEATH RATE (PER THUUSAND) 25.0 20.5 17.1 15.8 8.4GCUSS REPRODUCTION RATE 3.4 3.4 3.4 3.2 2.3FAMILY PLANNINGACCEPTURS, ANNUAL (THUUSANDS) .. 7.6 33.2USERS (PERCENT UF MAKRRIED WUOIEN) .. ..
FoUD AND NUTRITIUNINDEX UF FUUD PRODUCTIUN
PER CAPITA (19b9-71=100) 100.0 102.0 86.0 89.9 108.3
PER CAPITA SUPPLY OFCALORIES (PERCENT UF
REQUIREMENTS) 79.0 82.0 83.0 92.3 107.6PRUTEINS (GRAMS PER DAY) 43.0 44.0 45.0 52.8 65.8UF WHICH ANIMAL AND PULSE 11.0 10.0 11.0 16.1 34.0
CHILD (AGLS 1-4) MORTALITY RATE 37.4 29.3 22.4 20.2 7.6
HEALTHLIFE EXPECTANCY AT BIRTH (YEARS) 38. 7 44.0 48.5 50.8 64.1INFANT MORTALITY RATE (PERTHUUSAND) .. 154.0/c .. .. 70.9
ACCESS TO SAFE WATER (PERCENT OFPOPULATION)
TUTAL .. .. .. 27.4 65.7URBAN .. .. .. 74.3 79.7RURAL .. .. .. 12.6 43.9
ACCESS TO EXCRETA DISPUSAL (PERCENTOF PUPULATION)
TUTAL .. .. .. .. 59.9URBAN .. .. .. .. 75.7RURAL .. .. .. .. 30.4
POPULATIUN PER PHYSICIAN 73711.4 24667.2 15742.0 13844.1 1728.2POPULATION PER NURSING PERSON 6020.0/d 5073.0 4012.7 2898.6 1288.2POPULATION PER HOSPITAL BEDTOTAL 2765.0/e 2221.7 1369.5 1028.4 40i.2URBAN .. 494.4 373.8 423.0 558.0RURAL .. 18488.8 5494.7 3543.2
ADMISSIONS PER HOSPITAL BED .. ..
HOUSINGAVERAGE SIZE UF HUUSEHULD
TOTAL .. ..URBAN .. *- 4.7RURAL .. ..
AVERAGE NUMBER OF PERSUNS PER RUOUMTUTAL .. ..URBAN 3.0 .. 2.2RC'AL ..
ACLESS TU ELECTRICITY (PERCENTUF DWELLINGS)
TOTAL 81.0 .. ..URBAN 81.3 .. 42.4RURAL .. .. ..
- 21 -ANNEX IPage 2 of 5
NIGERIA - SOCIAL INDICATORS DATA SMUT
NIGERIA REFERENCE GROUPS (WEIGHTED AVE%GXSM- OST RECENT ESTIMATE)-
MOST RECENT MIDDLE INCOME MIDDLE INCOMPF1960 /b 1970 /b ESTIATE /b AFRICA SOUTH OF SAHARA LATIN AMERICA & CARIBBEAN
EDUCATIONADJUSTED ENOLLHEHI RATIOS
PRYARY: TOTAL 36.0 32.0 62.0 73.7 101.7MALE 46.0 41.0 .. 96.8 103.0FEMALE 27.0 24.0 .. 79.0 101.5
SECONDARY: TOTAL 4.0 6.0 13.0 16.2 35.3MALE 6.0 8.0 .. 25.3 34.9FEMALE 1.0 4.0 .. 14.8 35.6
VOCATIONAL ENROL. (Z OF SECONDARY) 5.0 8.5 3.0/f 5.3 30.1
PUPIL-ThACHER RATIOPRIMARY 30.0 34.0 34.0 36.2 29.6SSCo2DARY 19.0 21.0 25.0 23.6 15.7
ADULT LITERACY RATE (PERCENT) 15.4 . .. .. 80.0
COHSMUOTIONPASSEBR CARS PER THOUSAND
POPULATION 0.7 0.9 .. 32.3 42.6RADIO RECEIVERS PER THOUSAND
POPULATION 2.8 19.3 66.8 69.0 215.0TV RECEIVERS PER THOUSAND
POPULATION 0.1 1.1 5.7 8.0 89.0NEWSPAPER ("DAILY GENERALINTEREST-) CIRCULATIOti PERTNUUSAND POPULATION 8.0 4.8 6.9 20.2 62.8CINEMA ANNUAL ATTENDANCE PER CAPITA .. .. 0.5 0.7 3.2
LAbOR FORCETOTAL LABOR FORCE (THOUSANDS) 21788.5 25991.9 30310.1
FEMLE (PERCENT) 41.3 40.6 39.9 36.7 22.6AGRICULTURE (PERCENT) 70.8 62.1 54.7 56.6 35.0INDUSTRY (PERCENT) 10.4 13.8 18.4 17.5 23.2
PARTICIPATION RATE (PERCENT)TOTAL 42.2 39.3 36.7 37.2 31.8MALE 50.3 47.3 44.6 47.1 49,0FEMALE 34.4 31.5 29.0 27.5 14.6
ECONOMIC DEPENDENCY RATIO 1.1 1.2 1.4 1.3 1.4
INCOME DISTRIBUTIONPERCENT OF PRIVATE INCOMERECEIVED BY
HIGHEST 5 PERCENT OF HOUSEHOLDS .. ..
HIGHEST 20 PERCENT OF HOUSEHOLDS .. ..
LOWEST 20 PERCENT OF HOUSEHOLDS .. ..
LOWEST 40 PERCENT OF HOUSEHOLDS .. ..
POVERTY TARGET GROUPSESTIMATED ABSOLUTE POVERTY INCOMELEVEL (US$ PER CAPITA)
URBAN .. .. 472.0 381.2RURAL .. .. 181.0 156.2 187.6
ESTIMATED RELATIVE POVERTY INCOMELEVEL (US5 PER CAPITA)
URBAN A. .. 402.0 334.3 513.911URAL .. .. 134.0 137.6 362.2
ESTIMATED POPULATION BELOW ABSOLUTEPOVERTY INCOME LEVEL (PERCENT)
URBAN .. ..RURAL .. .. .. .. ..
Not availableNot applicable.
NOTES
/a The group averages for each indicator are population-weighted arithmetic means. Coverage of countriesamong the indicators depends on availability of data and is not uniform.
/b Unless otherwise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, between 1969and 1971; and for Moat Recent Estimate, between 1976 and 1979.
/c 1965-66 average; /d 1963; /e Including ex-North Cameroon under British administration; /f Certainfields of study previously classified under other second level education of vocational or technicalnature are now reported under general education.
May, 1981
14.4
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2.2 2 22 22 22 222.212222 2 2 22 0 22.2 2 1.0222 2 2
>22 22A2 2 22 2. 2 2 22 22 2 2 2 2 22
12 .2 2 . 2 22 .2 2 2 2 0 22 2 2 2 2 2 2 .2 . 2 221 .1. 22-.22 2 2. 2 2 2 2 2 2 2 0 0 . 2 2 22 2 2 2 2 2
2 .2 2.2 222 2.22 222 .2 22 2 42 2 22. 2.22 22 222 222 22. 2.. 22 2242 22 22.2 2222 2222 022 2 22 22.20 02 2 2 22 2.2 222 2 22 2.j22 22 ~ 2 2 2 2 2 2 222 2.2 2212.2 22 ~ 2l22~ ..2 22 2 22. 22.2.2 2 22 22. 2 2 42 22 ~ 2 2 7 .2
R22222 222 .22 .2. .2 2 .2 .o . 2 2 022022 .2 22 22 22 2 2 2 2 .. 22 22 2 22 2 22 20 02 0 22222 22 22 0 222 .1 2
2.2 222 2222.222 2.2 222..2 .22.2 2.22..752 12422 2 1 2 ~ .2 22
2. .222 022 2222 2 212 222 2.2 222 22 222 202 2 2 .22 . 2212 22.222 2 2 2.22 2.2.222. 0 222 022 2.2 2202 2 22. 2.222.2 2 22 222 2 2 2 22 222 222002 2 22 2 2.2 21 22 22 2021 222 2 22 2 . .22022.. ..22 2 2 2 2 22 2 V2 2 0I 4 2 2 2 2 2 2I. . 2 2 2 2 2 2 22 2 2 2 2 2 22 222 202.~.2 2 0 222 2 22 2.2 2220 22 2.220 2222.2 2.2 2 .2 2 222 0 2 222 222 2R02 2 22E E2 2 a2 240 20R. 2 2022.2 2.2 2 . 1 2 2 . 2 2 222222.212221022 222122 21 22 202122222.02222 .22 2 2 22 . 2 2 2 2 2. 22 20 2 2
22 22.22 222 2 2. 2222 22 .2 22 222 2222 22 2 222 22 22 . 22 2222 10 2.2 2 0 2
- 23 -
ANNEX IPage 4 of 5
ECONOMIC INDICATORS
GROSS NATIONAL PRODUCT IN 1978 ANNUAL RATE OF GROWTH (%, Constant Prices)
US$ Mln. % _1973-77 1977 1978
GNP at Market Prices 58800 100.0 7.4 3.0 5.6Gross Domestic Investment 18423 31.3 30.9 6.4 7.8Gross National Saving 14939 25.4 17.7 -8.8 9.4Current Account Balance -3261 5.6 - - -Exports of Goods, NFS 12116 20.6 -3.4 -1.8 7.1Imports of Goods, NFS 14580 28.4 36.0 21.5 -8.3
OUTPUT, LABOR FORCE ANDPRODUCTIVITY IN 1978
Value Added Labor Force/ V. A, Per WorkerUS$ Mln. __ Mln. __ us %
Agriculture 13920. 23.9 17.0 56.0 819 43.0Industry 21922 37.7 5,2 17.0 4216 220.0Services 22318 38.4 6.7 22.0 3331 174.0Unallocated - - 1.4 5.0 - -
Totai/Average 58160 100.0 30.3 100.0 1919 100.0
GOVERNMENT FINANCEGeneral Government Central Goverrnent
(N Mln.) % of GDP (N Mln.) % of GDP1979/80 1978 719 1976/77-197 1979/80 1978/79 1976/77-1977/78
Current Receipts 13288 19.5 34.4 9805 12.2 20.0Current Expenditure 5428 13.1 15.7 2890 6.9 8.0Current Surplus 7861 6.4 18.7 6915 5.3 12.0Capital Expenditures 9095 18.3 30.0 7320 11.7 18.9External Assistance (net)
MONEY, CREDIT, AND PRICES 1975 1976 1977 1978 1979 1980 2/(Million N Outstanding End Period)
Money and Quasi Money 4167 5732 7439 8087 10406 11502Bank Credit to Public Sector -608 653 2634 4105 3678 2494Bank Credit to Private Sector 1798 2423 3465 4684 5413 5846
(Percentages or Index Numbers)
Money and Quasi Money as % of GDP 25.1 26.9 28.8 n.a. n,a. n.a.General Price Index (1960 = 100) 3/ 289.6 352,4 423.1 492v5 550.0 604.0Annual percentage changes in:
General Price Index 33.5 23.9 15.4 16.5 11.8 9.9Bank Credit to Public Sector ,, ., 303.4 55.8 -10.4 -32.2Bank Credit to Private Sector 58.4 34.8 43.0 35.2 15.6 8.0
NOTE: All conversions to dollars in this table are at the average exchange rate prevailing during the periodcovered.
1/ Total labor force; unemployed are allocated to sector of their normal occupation. "Unallocated" consistsmainly of unemployed workers seeking their first job.
2/ Data cover the period June 1980.3/ Index of Urban Consumer Prices up to 1977. National Price Index from 1978.
Not available.
April 1981
ANNEX I- 24 -Page 5 of 5
TRADE PAYMENTS AND CAPITAL FLOWS
BALANCE OF PAYMENTS MERCHANDISE EXPORTS (AVERAGE 1977-79)
1978 1979 1980 US$ Mln. %(Millions US$)
Exports of Goods, NFS 11,319 17,796 24,758 Crude Oil 12,107 92.2Imports of Goods, NFS 14,580 15,285 20,723 Cocoa Products 640 4.9Resource Gap (deficit - -) -3,261 2,511 4,035 Palm Products 30 OM2Tin 18 0.1Interest Payments (net) 246 -247 370 All Other Commodities 332 2.6Workers' Remittances - - -
Other Factor Payments (net) -474 -201 -876 To1 13,127 100.0Net Transfers -269 -388 -576 otaBalance on Current Account -3,758 1,675 2,953
Direct Foreign Investment 211 305 340 EXTERN4AL DEBT, DECEMBER 31, 1980Net MLT Borrowing
Disbursements 1,434 1,022 1,138 US$ Mln.Amortization -24 -38 -141Subtotal 1,410 984 997 Public Debt, incl. guaranteed 7,149Capital Grants - - - Non-Guaranteed Private Debt ,.
Other Capital (net) -151 10 81 Total outstanding & disbursedOther items n.e.i -69 388 478Increase in Reserves (+) 2,357 -3,362 -3,892 DEBT SERVICE RATIO FOR 1980k1
Gross Reserves (end year) XNet Reserves (end year) 2,348 5,710 9,602
Public Debt. incl. guaranteed 1.7Fuel and Related Materials Non-Guaranteed Private DebtImports Total outstanding & disbursedof which: Petroleum 275 343 442
Exportsof which: Petroleum 8,505 16,877 24,743 IBRD/IDA LENDING (June 30, 1981)(Millions $)
RATE OF EXCHANGE IBRD IDA
1976: N1.00 = US$1.60 Outstanding & Disbursed 543.4 37.31977: N1.00 = US$1.55 Undisbursed 595.1 -1978: N1.00 = US$1.571979: N1.00 US$1.66 Outstanding incl. Undisbursed 1,138.5 37.31980: N1.00 - US$1.83
* 1981: N1.00 - US$1.36
1/ Ratio of Debt Service to Exports of G6ods and Non-Factor Services.
2/ Excluding four loans which are not yet effective.
Not Available
* As of June.
June 1981
- 25 -ANNEX IIPage 1 of 7
THE STATUS OF BANK GROUP OPERATIONS IN NIGERIA
A. STATEMENT OF BANK GROUP OPERATIONS IN NIGERIA(As of September 30, 1981)
Loan or US$ MillionCredit Amount (less cancellation)Number Year Borrower Purpose Bank IDA Undisbursed
Sixteen loans and two credits fully disbursed 479.6 35.3
838- 1972 Nigeria Roads 26.3 5.6929 1973 Nigeria Education 54.0 32.5
1045 1974 Nigeria Cocoa Development 20.0 2.11091 1975 Nigeria Livestock 21.0 10.41092 1975 Nigeria Agric. Dev. Funtua 29.0 0.61099 1975 Nigeria Agric. Dev. Gusau 19.0 0.31103 1975 Nigeria Rice Development 17.5 5.41164 1975 Nigeria Agric. Dev. Gombe 21.0 0.11183 1975 Nigeria M.W. State Oil Palm 29.5 20.01191 1976 Nigeria E.C. State Oil Palm 19.0 13.01192 1976 Nigeria W. State Oil Palm 17.0 11.81454 1977 Nigeria Agric. Dev. Lafia 27.0 11.51455 1977 Nigeria Agric. Dev. Ayangba 35.0 13.11591 1978 Nigeria Nuc. Est. Smallholder Oil 30.0 22.31597 1978 NIDB Industrial Development 60.0 47.11667 1979 Nigeria Agric. Dev. Bida 23.0 17.31668 1979 Nigeria Agric. Dev. Ilorin 27.0 20.41679 1979 Nigeria Forestry 31.0 26.31711 1979 Nigeria Water Supply - Kaduna 92.0 90.21719 1979 Nigeria Agric. & Rural Mgmt. Inst. 9.0 8.41766 1980 NEPA Power - Lagos 100.0 100.01767 1980 Nigeria Urban Development - Bauchi 17.8 17.6
*1838 1980 Nigeria Agric. Dev. - Oyo-North 28.0 28.01854 1980 Nigeria Agric. Dev. - Ekiti-Akoko 32.5 32.51883 1980 Nigeria Roads 108.0 107.5*1981 1981 Nigeria Agric. Dev. - Bauchi 132.0 132.0*1982 1981 Nigeria Agric. Dev. - Kano 142.0 142.0
*2029 1981 Nigeria Tech. Assistance-Agric. 47.0 47.0*2036 1982 Nigeria Water Supply - Anambra 67.0 67.0
Total 1,761.2 35.3 1,032.0Of which has been repaid 183.6 2.8
Total Outstanding 1,577.6 32.5
Amount sold 16.8Of which has been repaid 16.8 0.0
**Total now held by Bank & IDA 1,77.6 32.5 1,032.0
Total undisbursed
B. STATEMENT OF IFC INVESTMENTS(As of September 30, 1981)
Fiscal Type of Amount in US$ MillionYear Business Loan Equity Total
1964, 1967, Arewa Textiles Ltd. Textile Mfg. 1.0 0.6 1.61970
1964 Nigeria Industrial Dev. Fin. Co. 1.4 1.4Developsent Bank Ltd.
1973 Funtua Cottonseed Veg. Oil 1.6 1.6Crushing Ltd. Crushing
1973 Nigerian Aluminium Aluminium 1.0 0.3 1.3Extrusion Ltd. Processing
1974 Lifiaga Sugar Sugar 0.1 0.1Estate
1980 NTM Textiles 6.2 0.7 6.9
1981 Ikeja Hotel Tourism 7.5 2.0 9.5
Total Cross Commitments 17.3 5.1 22.4
Less cancellations 1.4 0.1 1.5Less sold and repaid 2.4 1.5 3.9
Total Commitment now held by IFC 13.5 3.5 17.0
Undisbursed 6.5 2.0 8.5
* Not yet effective** Prior to exchange rate adjustments1/ Undisbursed balance was cancelled & loan was closed on Nov. 13, 1981.
- 26 - ANNEX IlPage 2 of 7
C. PROJECTS IN EXECUTION4 1/
Loan No. 929-UNI Third Education Project: USS54.0 million Loan ofAugust 16, 1973; Effective Date: January 14, 1975;Closing Date: December 31, 1982
Since appraisal, project costs have increased fourfold. In FY79,the scope of the project was reduced and the closing date was extended.Project management has since then improved, but project progress is behindschedule.
Loan No. 1045-UNI Second Cocoa Project: US~2U million Loan ofOctober 11, 1974; Effective Date: October 15, i975;Closing Date: September 30, 1981
The project's planting targets have been fully achieved by allfour participating states. Loan recovery performance has however surfacedas a major problem. A tight "action program" has been initiated, andupdating and reconciliation of farmer loan records has been completed. AProject completion report es being prepared.
Loan No. 1091-UNI Livestock Development Project: US$21.U million Loanof March 20, 1975; Effective Date: July 19, 1976;Closing Date: July 1, 1983
Project implementation has improved. The project is now undergood management which has overcome most of the initial problems. Supportingservices are better organized, and credit is now being effectively channeledthrough NACB. The closing date was recently extended two years to allowproduction investments to be completed.
Loan No. 1092-UNI Funtua Agricultural Development Project: Ub29Q.U millionLoan of March 20, 1974; Effective Date: January 5, 1976,Closing Date: July 1, 1982
Project implementation is complete with satisfactory farmer responseand the full support of both Federal and State Governments. Demand for inputsis consistently above appraisal estimates. The federally controlled Agricul-tural Projects Monitoring, Evaluation and Planning Unit financed under thisloan is fully operational. A project completion report is under preparation.An expanded second stage project to cover the remainder of Kaduna State hasbeen appraised.
1/ These notes are designed to inform the Executive Directors regardingthe progress of projects in execution, and in particular to report anyproblems which are being encountered, and the action being taken toremedy them. They should be read in this sense, and with the under-standing that they do not purport to present a balanced evaluation ofstrengths and weaknesses in project execution.
- 27 - ANNiX IIPage 3 of 7
Loan No. 1099-UNI Gusau Agricultural Development Project: 'JSt19.0 million
Loan of April 4, 1975; Effective Date: January 5, 1976;
Closing Date: July 1, 1982
The project has been completed with satisfactory support from
both Federal and State Governments. Farmer response has been good, and
appraisal objectives have been met and in some cases exceeded. A project
completion report is under preparation. A loan has been negotiated in support
of a second phase project covering the whole of Sokoto State and will be
submitted for Board consideration in due course.
Loan No. 1103-UNI Rice Project: US$17.5 million Loan of April 25,
1974; Effective Date: January 10, 1976; ClosingDate: December 31,1982
Protect implementation made a slow start due to deficiencies in
counterpart funding and staffing limitations. The Bank has withdrawn from
the project component located in Cross River State because of acute problems
of cost overruns and inadequate physical progress. Physical project progress
is better in Anambra State and Imo State but development has been impaired by
insufficient counterpart funding. Once this problem is resolved, considera-
tion will be given to reallocating the balance of loan funds held over from
the Cross River State cumponent to the components in Anambra and Imo States.
Loan No. 1164-'UNI Gombe Agricultural Development Project: US$21.0 million
Loan of September 29, 1975; Effective Date: DecemDr' 29.
1976; Closing Date: July 1, 1982
The project has been implemented satisfactorily with full support
from both Federal and State Governments and is virtually complete. A project
completion report is being prepared. The whole of Bauchi State is to be
served by a second-stage project supported by the Bank (Loan 1981-UNI).
Loan No. 1183-UNI Mid-Western (Bendel) State Oil Palm Project: US$29.5
million Loan of December 31, 1975; Effective Date:
October 17, 1977; Closing Date: December 31, 1984
Appraisal targets for the tucleus estate and smalliolder components
have not been met due to delays in land acquisition and the project has been
facing serious financial and managerial pro'blems. Persistent difficulties
forced the Bank to suspend disbursements under the nucleus estate part of the
Loan as of July 13, 1981. However, progress under the smalltiolder component
continued to be satisfactory and, with the appointment of managin6 agents for
the estate company and additional counterpart funding from Bendel State, tne
Bank lifted suspension on November 1, 1981.
-28 - ANNEX IIPage 4 of 7
Loan No. 1191-UNI East Central (Imo) State Oil Palm Project: US$19.0million Loan of February 12, 1976; Effective Date:April 6, 1977; Closing Date: December 31, 1984
Project implementation was initially delayed due to the creation ofnew states and problems with staffing. Even though appraisal planting targetshave not been met and the construction of palm oil mills has been delayed, theproject has the best potential for smallholder oil palm development, andplanting rates are now at an acceptable level. The palm oil mill is currentlybeing designed. The project has recently encountered serious problems due tothe insufficiency of counterpart funding.
Loan No. 1192-UNI Western (Ondo) State Oil Palm Project: US$17.0million Loan of September 22, 1976; Effective Date:February 13, 1978; Closing Date: December 31, 1984
The smallholder component continues to face financial difficulties,and final targets may not be achieved. For the nucleus estate component, landacquisition, maAagement, and funding problems have delayed progress. Plantingsare in poor condition and processing facilities are inadequate. Because of theincreasingly serious nature of these problems the Bank. suspended disbursementsunder the Loan as of February 28, 1981. However, as the result of correctiveaction taken by Ondo State, the Bank lifted the suspension on November 1, 1981.
Loan No. 1454-UNI Lafia Agricultural Development Project: US$27.0million Loan of June 28, 1977; Effective Date:March 3, 1978; Closing Date: December 31, 1982
Although local counterpart funding is now adequate, the projectis still experiencing some problems of a technical nature, particularlyconcerning extension and training. However, overall project progress issatisfactory.
Loan No. 1455-UNI Ayangba Agricultural Development Project: US$35.0million Loan of June 2b, 1977; Effective Date:March 3, 1978; Closing Date: December 31, 1982
The project continues to improve with satisfactory support fromthe Federal and State Governments. The most significant improvement isthe introduction of the Training and Visit system, which has enhanced theimpact of the extension services. Farmer participation and physical pro-ject progress is good. Disbursements are also proceeding satisfactorily,but the timely provision of counterpart funding remains a problem.
- 29 - AiNhX ilLPage 5 of 7
Loan No. 1591-UNI Rivers State Nucleus Estate/Smallholder Oil PalmProject: US$30.0 million Loan of July 24, 197h;Effective Date: July 10, 1979; Closing Date:December 31, 1985
Loan effectiveness was delayed because of problems regardingcompletion of the State Loan Agreement, a Management Agreement, and Federaland State Legal Opinions. Physical progress is satisfactory, but fundingproblems persist after some improvement in late-1980. The smallholdercomponent faces some managerial difficulties.
Loan No. 1597-UNI Nigerian Industrial Development Bank, Ltd.: US~6Omillion Loan of June 15, 1978; Effective Date:October 24, 1978; Closing Date: December 31, 1984
About 70 percent of the loan has been committed and about 20 percentdisbursed. Both are less than expected at the time of appraisal owing tothe investment climate in 1978/79 which was affected very much by the un-certainties surrounding the change in government in late-1979. The invest-ment climate has recently improved considerably, however, and it is expectedthat the loan will be fully committed within a few months.
Loan No. 1667-UNI Bida Agricultural Development Project. US$23 millionLoan of September 17, 1979; Effective Date: April 25,1980; Closing Date: June 30, 1985
The project is progressing very well.
Loan No. 1668-UNI Ilorin Agricultural Development Project: US$27 millionLoan of September 17, 1979; Effective Date: April 25,1980; Closing Date: June 30, 1985
Project progress was impaired at first by delays in the recruitmentof intermediate-level project staff. These problems have now been substan-tially resolved and project implementation, although not yet fully satisfac-tory, is improving.
Loan No. 1679-UNI Forestry Plantation Project: US$31 million Loan ofOctober 29, 1979; Effective Date: June 30, 1980;Closing Date: June 30, 1985
The project is progressing satisfactorily, despite occasionalproblems in securing state funding.
30 - ANNEX IIPage 6 of 7
Loan No. 1711-UNI Kaduna Water Supply Project: US$92 million Loanof July 16, 1979; Effective Date: July 22, 1980;Closing Date: December 31, 1985
Project implementation was delayed by some initial procurementproblems which have now been resolved. The State Government approved a tariffincrease in April 1981, but the protracted approval process had made theincrease inadequate. The Kaduna State Water Board is now pursuing a furtherincrease.
Loan No. 1719-UNI Agricultural and Rural Management Training InistituteProject: US$9 million Loan of July 16, 1979; EffectiveDate: March 30, 1981; Closing Date: December 31, 1964
Management consultants are in the field, and project implementationhas been initiated.
Loan No. 1766-UNI Lagos Power Distribution Project: US$100 millionLoan of February 19, 1980; Effective Date: July 22,1980; Closing Date: June 30, 1984
The project, although some six months behind schedule, is pro-gressing in its initial stages. Tender evaluations for project materials,equipment, and services have been received by the Bank for review and approval,and consultant engineering services are proceeding satisfactorily.
Loan No. 1767-UNI Urban Development Project (Bauchi State): US$17.8 millionLoan of February 19, 1980; Effective Date: August 12, 19b0;Closing Date: June 30, 1983
Project progress has been impaired by management and staffing pro-blems. As a result of efforts by the Bauchi State authorities to resolvethese problems, the situation has now improved substantially. Civil workshave begun, and an accelerated implementation schedule has been introducedthat will permit the project to be completed within the time span envisaged atappraisal. Technical assistance to the Federal Mortgage Bank of Nigeria isproceeding well, and has already resulted in better management and in animproved planning and project implementation capability.
Loan No. 1838-UNI Oyo-North Agricultural Development Project: US28.0million Loan of August 25, 1980; not yet effective;Closing Date: September 30, 1985
The Oyo State Government has fulfilled almost all the effectivenessconditions.
-31 - ANNEX LIPage 7 of 7
Loan No. 1854-UNI Ekiti-Akoko Agricultural Development Project: US$3Z.5million Loan of December 15, 1980; Effective Date: November20, 1981; Closing Date: September 30, 1985
The project is proceeding satisfactorily in its initial stages.
Loan No. 1883-UNI Sixth Highway Project: US$108 million Loan of August25, 1980; Effective Date: December 11, 1980; ClosingDate: March 31, 1985
Contracts for the road strengthening works, the feasibility studyof the Calabar-Ikom road, and the training of maintenance technicians havebeen awarded, and the project is progressing satisfactorily in its initialstages.
Loan No. 1981-UNI Bauchi State Agricultural Development Project: US$132million Loan of September 2, 1981; not yet effective;Closing Date: December 31, 1986.
Almost all conditions of effectiveness have been fulfilled, managementis in place and the project is proceeding well.
Loan No. 1982-UNI Kano Agricultural Development Project: $142 million Loanof September 2, 1981; not yet effective; Closing Date:December 31, 1986.
The Kano State Government is making good progress toward meetingthe effectiveness conditions.
Loan No. 2029-UNI Agricultural Technical Assistance Project; US$47 millionLoan of September 2, 1981; not yet effective; Closing Date:December 31, 1986.
The Federal Government is making good progress towards meeting theconditions of loan effectiveness.
Loan No. 2036-UNI Anambra Water Supply and Sanitation Project: USA67 millionLoan of November 13, 1981; not yet effective; Closing Date:September 30, 1987.
The Anambra State Government is making good progress towards meetingthe conditions of loan effectiveness.
- 32 - ANNEX III
Page 1 of 1
SUPPLEMENTARY PROJECT DATA SHEET
SIXTH POWER PROJECT
Section I: Timetable of Key Events
(a) Time taken by the country to prepare the project: 19 months
(b) The agency which has prepared the project: NEPA and Consultants
(c) Date of first presentation to the Bank: March 1978
(d) Date of the first Bank mission to consider the project: March 1978
(e) Date of departure of the Appraisal Mission: October 28, 1979
(f) Date of completion of negotiations: May 7, 1981
(g) Planned date of effectiveness: March 31, 1982
Section II: Special Bank Implementation Actions
None
Section III: Special Conditions
(a) NEPA will no later than June 30, 1982, strengthen the organizationof its systems and distribution operations unit in charge ofrecording and analyzing power failures (para. 52);
(b) NEPA will engage consultants to review its billing and collectionsystems (para. 46);
(c) NEPA will carry out a power flow study of the interconnectionof the Igbin generating station to the Lagos power system(para. 52);
(d) NEPA will take all necessary action, including adjustments in itstariffs to achieve an 8 percent rate of return on the average valueof net fixed assets in operation (para. 58);
(e) NEPA will engage consultants to update the power development masterplan that was financed under loan 847-UNI (para. 46).
/I G E R
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UNDER.O '00 4/- - - EXISTING PROJECT CONSTRUCTION
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- ; 5State boundariesIR- Internotionl boundaries
CAMH EROONROEC
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rhis map has been prepared by the World ranks staff exlusively for the convenience; of tie readers ofCtie rep ort to v,h r s atta;,ed Toe deownn,sr,rns used ted thebotr,nda'ias shor4n on tiels map do notlrrt. aZrc icn crtl pof f/c Le /or/d Bank anrc is
- .ltl,h.jtes. any ,c,dgment r th, /ql rz l tac3uFr ol trw tenitryk or arn) nndorsemeret cracceptance of suct boundaries.
C E 0 0N --- Iteratioal oundrie
