Categories: Loans

FG Seeks $500m World Bank Loan for Dam Safety and Water Management Enhancement

The Federal Government of Nigeria has formally requested a $500 million loan from the World Bank to improve dam safety and enhance water resource management across the nation.

This loan, aimed at addressing the country’s pressing water security challenges, is expected to significantly boost agricultural productivity through the Sustainable Power and Irrigation for Nigeria (SPIN) Project.

The request was detailed in a World Bank Project Information Document released on Monday, highlighting the SPIN project’s focus on four critical areas: institutional strengthening and capacity building, irrigation modernization, improvements in dam operations and safety, and effective project management.

The World Bank’s proposed approval date for the SPIN project is September 26, 2024.

The project aims to reinforce federal and state institutions responsible for water resource management by developing national dam safety guidelines, providing training for water resources and irrigation management, and creating a comprehensive hydropower master plan.

“Nigeria faces water security challenges which impact water availability for drinking, energy, and food production, exacerbated by climate change,” the document stated. “Harnessing water storage and ensuring dam safety are central to climate change adaptation and mitigation in Nigeria. It is crucial for improving water management for supply, irrigation, and hydropower generation, and for protecting against floods and droughts.”

Nigeria boasts over 400 dams with an estimated total combined storage of 59 billion cubic meters. Of these, 46% are federally owned and managed by the Federal Ministry of Water Resources and Sanitation through River Basin Development Authorities, while 48% are state-owned.

However, many dams remain incomplete, and over 50% of the large dams built in the 1970s and 80s require rehabilitation due to inadequate budgets, human resources, and capacity for proper management, operation, and maintenance.

The 2022 floods, which caused an estimated $6.7 billion in economic damage, underscored the urgent need for improved dam safety and water management.

The SPIN project intends to rehabilitate and modernize 40,000 hectares of irrigated land and establish Water User Associations to manage these irrigation schemes efficiently.

Additionally, the project will focus on rehabilitating and enhancing the safety of priority dams, conducting risk assessments, preparing emergency action plans, and implementing structural safety improvements.

To ensure effective implementation, monitoring, and evaluation, the project will establish a Federal Project Management Unit and Technical Units at both federal and state levels.

This initiative by the Federal Government represents a significant step towards securing Nigeria’s water resources, ensuring sustainable agricultural practices, and protecting the country from the adverse effects of climate change.

Samed Olukoya

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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