The Federal Government of Nigeria has concluded two days of high-level consultations with the World Bank Group on the Power Sector Recovery Programme (PSRP).
The measures that will be implemented through 2021 are targeted at enhancing transparency, service delivery and re-establishing investor confidence, and hence, investment in the sector.
Accelerating electricity access, including through off-grid public-private partnerships, is an important component of the PSRP.
The meetings assessed progress in implementing the programme and followed on similar high-level meetings that took place in Abuja in December 2016 and in Washington during the 2017 World Bank and International Monetary Fund (IMF) spring meetings.
Government clarified progress made to date and next steps on key components of the PSRP. It has prepared a financing plan to ensure financial sustainability of the power sector and included it in the Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper submitted to the National Assembly in October 2017.
The financing plan will be monitored regularly and incorporate contingencies should the sector shortfall deviates from the base case assumptions until retail tariffs are adjusted in line with improved service delivery to attain cost recovery by 2021.
The PSRP envisages measures to contain costs and carefully manage contingent liabilities to ensure cost-reflective and affordable tariffs. In this context, it was agreed that existing generation infrastructure assets would need to be optimized before the sector assumes new financial obligations that could not be supported.
Further, least cost planning for the interconnected grid system will be institutionalized and its governance arrangements elaborated in the PSRP.
Government anticipates that all arms of government will continue to advance the programme.
The parties agreed that the process of “Market Reset”, redefining the revenue requirement of the sector based on new performance parameters and detailed investment plans, will be implemented rigorously, transparently and in a highly consultative manner.
The Market Reset is to be led by the Nigerian Electricity Regulatory Commission (NERC) whose independence is recognized by government and which needs to have sufficient resources with which to discharge its mandate.
The World Bank delegation informed government that it was pleased with progress in implementing the early actions of the PSRP.
The Bretton Wood institution is committed to assisting government with programme implementation, working closely with the PSRP Implementation Monitoring Team, which reports directly to the vice president of Nigeria.