The World Bank on Friday announced the approval $500 million to support the Nigeria Government’s plans to improving electricity distribution project through mass metering.
The project, according to a statement by the bank, will help boost electricity access by improving the performance of the Electricity Distribution Companies (DISCOs) through a large-scale metering programme
In addition, the global bank said 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.
According to the 2020 World Bank Doing Business report, Nigeria ranks 171 out of 190 countries in getting electricity and electricity access is seen as one of the major constraints for the private sector.
The lack of reliable power is a significant constraint for citizens and businesses, resulting on annual economic losses estimated at $26.2bn (N10.1tn), which is equivalent to about two per cent of the country’s Gross Domestic Product.
Speaking on the funding, the World Bank Country Director, Shubham Chaudhuri, said the support would improve access and reliability of power, reduce poverty and unlock economic growth in the aftermath of the global COVID-19 pandemic.
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“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,” he added.
The Nigeria Distribution Sector Recovery Programme (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.
This project, according to World Bank, complements the support provided under the Power Sector Recovery Operation (PSRO) approved in June 2020.
Specifically, the bank said it would 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.
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It will also help strengthen the financial and technical management of DISCOs to improve the transparency and accountability of the distribution sector.
“The programme 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 task team leader for the project, Nataliya Kulichenko, said.
The bank added that the programme would 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 risks in decision making.
