Electricity distribution: FG secures $500m World Bank loan to strengthen DisCos’ liquidity
By Matthew Denis
Respite is on the way in the power sector as the Federal Government has borrowed a whopping sum of $500 million from the World Bank to strengthen electricity distribution in the country.
This was disclosed in a statement signed by Head Public Relations Bureau of Public Enterprise, Amina Tukur Othman, and made available to NewsDirect on Thursday.
The DisCos have over the years been marred by liquidity issues thus affecting the quality of service.
This has thus prompted the intervention of the Assets Management Corporation of Nigeria (AMCON), Fidelity Bank, Transcorp Group, amongst others over the years to take over some of the companies that were on the brink of collapse.
The statement read, “In a strategic move to address the identified gaps in the Electricity Distribution Companies (DisCos), the Federal Government of Nigeria has secured a $500 million loan from the World Bank.”
According to the statement the loan was approved during Former President Muhammadu Buhari’s administration on February 4, 2021, by the World Bank Board of Directors.
“This funding supports the Nigerian Distribution Sector Recovery Program (DISREP) aimed at improving the financial and technical Performance of the DisCos.
“The Distribution Sector Recovery Program (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 (PIPs), which have been approved by the Nigerian Electricity Regulatory Commission (NERC).”
It stated further that key areas of improvement include, Bulk procurement of customer/retail meters and meter data management systems, Implementation of a Data Aggregation Platform (DAP).
“Strengthening governance and transparency within the DisCos, Program Components as the DISREP comprises two main components Program for Results (PforR) and Allocation $345 million.”
“The Purpose which is to support the implementation of selected PIP components and implementation: Bureau of Public Enterprises (BPE)Investment Project Financing (IPF): Allocation: $155 million.”
It further added that the purpose is to finance the procurement of meters, a Data Aggregation as the DISREP loan, particularly the Investment Project Financing (IPF) component, is expected to significantly benefit the Nigerian Electricity Supply Industry (NESI).
