W’Bank Approves $500m to Support Power Supply in Nigeria


By Obinna Chima

The World Bank has approved $500 million to support the federal government in improving the country’s electricity distribution companies’ (Discos) operations.

The Washington-based institution disclosed this in a statement Friday.

It anticipated that the project would help boost electricity access by improving the performance of the Discos through a large-scale metering program desired by Nigerians for a long time.

In addition, it pointed out that financial support would be provided to private distribution companies only on achievement of results in terms of access connections, improved financial management and network expansion.

The bank disclosed that 85 million Nigerians don’t have access to grid electricity. This, it stated represents 43 per cent of the country’s population and makes Nigeria the country with the largest energy access deficit in the world.

According to the multilateral institution, lack of reliable power remains a significant constraint for citizens and businesses, resulting in annual economic losses estimated at $26.2 billion (N10.1 trillion) which is equivalent to about 2 percent of GDP.

It quoted the 2020 World Bank Doing Business report to have revealed that Nigeria ranked 171 out of 190 countries in getting electricity and electricity access is seen as one of the major constraints for the private sector.

World Bank Country Director, Shubham Chaudhuri, was quoted to have said: “Improving access and reliability of power is key to reduce poverty and unlocking economic growth in the aftermath of the global COVID-19 pandemic.”

He added: “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 Nigeria Distribution Sector Recovery Program (DISREP) is expected to 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 (PSRO) approved in June 2020.

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.

In his comment, World Bank task team leader for the project, Nataliya Kulichenko said: “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.”

According to the bank, the program 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.

It stated that the DISREP supports the development of regulatory guidance on climate-resilient infrastructure and facilitates inclusion of climate risks in decision making.