World Bank has approved $500 million to support Nigeria to improve its electricity distribution sector.
The bank, in a statement on Friday, said that the project will help boost electricity access by improving the performance of the Electricity Distribution Companies (DISCOs) through a large scale metering program desired by Nigerians for a long time.
It explained that financial support would be provided to private distribution companies only on achievement of result in terms of access connections, improved financial management and network expansion.
According to the bank, 85 million Nigerians do not have access to grid electricity.
“This represents 43 per cent of the country’s population and makes Nigeria the country with the largest energy access deficit in the world,” the statement said.
“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 2 per cent of GDP.”
The statement quoted Shubham Chaudhuri, World Bank Country Director for Nigeria, as saying that “Improving access and reliability of power is key to reduce poverty and unlocking economic growth in the aftermath of the global COVID-19 pandemic.”
“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,” it said.
The bank said the Nigeria Distribution Sector Recovery Program (DISREP) will 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.
It further explained that the 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,” the statement said.
The statement also quoted Nataliya Kulichenko, World Bank task team leader for the project, as saying “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,” World Bank said.
The statement added that the programme will 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.
“DISREP supports the development of regulatory guidance on climate-resilient infrastructure and facilitates inclusion of climate risk in decision making,” the statement reads.
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