The African Development Bank (AfDB) has approves $184.2 million loan to encourage private investments into the Nigerian power sector, PUNCH reported.

AfDB also said it had approved $3.1 million loan to help build capacity in power genaration and distribution as the leading oil producer and exporter in Africa works to meet 40,000 megawatts by the year 2020.

“The Board’s decision will allow the ADB to support the Nigerian government’s efforts to reform the power sector and position the country for sustainable and inclusive growth,” AfDB said in a statement.

“This in turn will increase the comfort level of private sector financiers and commercial lenders investing in the Nigerian power sector privatization programme,” added the statement.

According to the bank, available data from the Nigerian government shows that power outages cost the country about three per cent of its economy annually.

It estimated that with private support the west African country “could generate additional 1,380 MW of power by 2016,”  and increase Nigerians’ access to more reliable and affordable electricity from 41 percent currently to 50 per cent by 2016.

The bank explained that the potential impact of the programme would ensure effective and steady power supply, which is critical to the sustainability of Nigeria’s development path.

Nigeria’s current maximum electricity generation capacity of approximately 5,500 MW is inadequate to meet demand estimated at 10,000 MW.