A $750m International Development Association credit has been approved by the World Bank for Nigeria’s Power Sector Recovery Operation.
This was contained in a statement issued by the bank on Wednesday.
The statement quoted the bank’s Country Director for Nigeria, Shubham Chaudhuri, as saying the credit would help to improve the electricity supply in Nigeria.
The bank expressed worry that about 47 per cent of Nigerians had no access to grid electricity and those who had access faced regular power cuts.
It said the economic cost of power shortages in Nigeria was estimated at around $28bn, equivalent to two per cent of the country’s Gross Domestic Product.
The World Bank said, “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.”
According to the statement, 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.
It said, “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 4,500MWh/hour of electricity is supplied to the distribution grid by 2022 by strengthening the regulatory, policy and financing framework.”