The World Bank has approved $750million International Development Association credit for Nigeria’s Power Sector Recovery Operation to improve electricity supply.
In a statement on Tuesday, the World Bank said the loan was for the power sector recovery operation to achieve financial sustainability and enhance accountability in the sector.
It explained that about 47 per cent of Nigerians do not have access to grid electricity and those, who had access faced regular power cuts.
World Bank Country Director for Nigeria, Shubham Chaudhuri said lack of reliable power had stifled economic activity and private investment and job creation.
He said, “The lack of reliable power has stifled economic activity and private investment and job creation, which 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 amidst the COVID-19 pandemic.”
The PSRO provides results-based financing to support the implementation of the power sector recovery programme.
He added, “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.”