World Bank has approved a $750 million International Development Association facility for Nigeria Government which is to be used to improve electricity supply in the country.
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 World Bank, about 47% of Nigerians do not have access to grid electricity and those who do have access, face regular power cuts.
Shubham Chaudhuri, the World Bank Country Director for Nigeria said, the loan is for the power sector recovery operation (PSRO) to achieve financial sustainability and enhance accountability in the sector. According to the bank, the PSRO will ensure that 4,500 MWh/hour of electricity is supplied to the distribution grid by 2022.
The bank put Nigeria’s economic loss due to power shortages at $28 billion, about 2 percent of the nation’s gross domestic product.
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.
This will 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.”.
It will also 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.