World Bank approves $500m for Nigeria’s electricity distributors
The World Bank announced on Friday that it had approved $500 million to support the government of Nigeria in improving its electricity distribution sector.
The multilateral financial institution said the project would help boost electricity access by improving the performance of the electricity distribution companies through a large-scale metering programme desired by Nigerians for a long time.
It said the financial support would be provided to private Discos only on achievement of results in terms of access connections, improved financial management and network expansion.
According to the World Bank, the lack of reliable power is a significant constraint for citizens and businesses, resulting on annual economic losses estimated at $26.2 billion (N10.1 trillion) which is equivalent to about two percent of GDP.
“Improving access and reliability of power is key to reduce poverty and unlocking economic growth in the aftermath of the global COVID-19 pandemic,” said the World Bank Country Director, Shubham Chaudhuri.
“The operation will help improve the financial viability of the DISCOs and increase revenues for the whole Nigerian power sector, which is critical to save scarce fiscal resources and create jobs by increasing the productivity of private and public enterprises”.
The bank said the Nigeria Distribution Sector Recovery Program would help improve service quality, as well as the financial and technical performance of distribution companies by providing financing based on performance and reduction of losses.
This project complements the support provided under the Power Sector Recovery Operation approved in June 2020, according to the statement.
It said, “Specifically, it will ensure that distribution companies make necessary investments to rehabilitate networks, install electric meters for more accurate customer billing and to improve quality of service for those already connected to the grid.
“It will also help strengthen the financial and technical management of Discos to improve the transparency and accountability of the distribution sector.”
“The program will only be eligible to those DISCOs that transparently declare their performance reports to public with actual flow of funds based on strict verification of achieved performance targets by an independent third party. The program would also make meters available at affordable prices to all consumers in Nigeria, a long pending demand of Nigerians,” said theWorld Bank task team leader for the project, Nataliya Kulichenko.
The World Bank said the programme would reduce the CO2 emissions of the Nigerian power sector by reducing technical losses, increasing energy efficiency, replacing diesel and biomass with grid-electricity, and investing more in on- and off-grid renewable energy.