World Bank Approves $750m Credit for Nigeria’s Power Sector
The World Bank has approved a $750 million International Development Association credit for Nigeria’s Power Sector Recovery Operation.
The Bank’s Country Director for Nigeria, Shubham Chaudhuri in a statement on Wednesday said that credit would help to improve electricity supply in Nigeria.
The Bank expressed worry over the electricity crisis Nigerians are faced with, especially as about 47 per cent of Nigerians have no access to grid electricity while those connected are confronted with irregular power supply.
Estimating the economic cost of power shortages in Nigeria to about 28 billion dollars, the World Bank noted it is equivalent to two per cent of the country’s Gross Domestic Product.
It stated that getting access to electricity was one of the major constraints for the private sector, according to the Ease of Doing Business report.
“Lack of reliable power has stifled economic activity and private investment and job creation.
”This is ultimately what is needed to lift 100 million Nigerians out of poverty.
“The objective of this operation is to help turn around the power sector and set it on a fiscally sustainable path. This is particularly urgent at a time when the government needs all the fiscal resources it can marshal to help protect lives and livelihoods amid the COVID-19 pandemic.
“The PSRO is expected to increase annual electricity supplied to the distribution grid, enhance power sector financial viability while reducing annual tariff shortfalls and protecting the poor from the impact of tariff adjustments.
“This will enable the turnaround of power sector while helping the Federal Government to redirect large fiscal resources from highly regressive tariff shortfall financing towards critical crisis-responsive and pro-poor expenditures. It will also increase public awareness about ongoing power sector reforms and performance.
“Specifically, the PSRO will ensure that 4,500 mwh/hour of electricity is supplied to the distribution grid by 2022 by strengthening the regulatory, policy and financing framework.
“It will also enhance the accountability and financial viability of the sector, helping the sector create a track record of sustainable operation necessary for unlocking much needed private investments in the future,” the statement read in part.