Nigeria loses $26.2 billion or N10.1 trillion annually from poor access to electricity supply, the World Bank has revealed.
The global apex bank which disclosed this in a statement on Friday, February 5, announced that it has approved $500 million to support the government of Nigeria in improving its electricity distribution sector.
It said 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.
The bank also 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 World Bank, 85 million Nigerians, representing 43 percent of the country’s population, don’t have access to grid electricity, making Nigeria the country with the largest energy access deficit in the world.
The 2020 World Bank Doing Business report indicates that 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.
World Bank Country Director, Shubham Chaudhuri said, “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”.
The World Bank assured that 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.
This project, it noted, will complement the support provided under the Power Sector Recovery Operation (PSRO) approved in June 2020. 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 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 task team leader for the project, Nataliya Kulichenko, said.
Also, the program 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 risks in decision making