The Bureau of Public Enterprises said on Thursday that the Federal Government of Nigeria has obtained a $500 million loan from the World Bank to support the country’s electrical distribution industry.
Nigerian power distribution businesses have received a lot of flak for being the weakest link in the nation’s power value chain. This is the result of numerous mistakes made by the Discos. For example, of the approximate 13 million energy users, around eight million are registered users who are not metered by Discos.
Additionally, discos have complained about inadequate power supplies to numerous places. Along with other complaints, customers on anticipated billing accuse Discos of extortion.
Following the industry’s November 2013 privatization of its energy producing and distribution divisions, Nigeria gained 11 power distribution companies. However, the Discos have been finding it difficult to satisfy end-user needs ever since.
The World Bank has negotiated a $500 million loan, which the BPE announced on Thursday, to assist in addressing the numerous difficulties facing the Discos.
“The Federal Government of Nigeria has secured a $500 million loan from the World Bank as a strategic move to address the identified gaps in the electricity distribution companies,” BPE said in a statement released in Abuja by Amina Othman, Head of Public Communication.
The statement said, “This money supports the Nigerian Distribution Sector Recovery Programme, which aims to improve the financial and technical performance of the Discos. It was approved on February 4, 2021, by the World Bank board of directors.
“The DISREP is designed to enhance the financial and technical operations of the Discos through capital investment and the financing of key components of their Performance Improvement Plans, which have been approved by the Nigerian Electricity Regulatory Commission.”
The Bureau of Public Enterprises (BPE) has allocated $345m to the DISREP program, aimed at improving customer/retail meters and meter data management systems.
The program also includes the implementation of a Data Aggregation Platform and strengthening governance and transparency within Discos.
The second component, Investment Project Financing, is allocated $155m to finance the procurement of meters, a data aggregation platform, and technical assistance. Both components aim to support the implementation of selected PIP components.