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World Bank approves $750 million loan to Nigeria for power sector

The World Bank noted that about 47% of Nigerians do not have access to grid electricity.

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Nigeria misses out as World Bank lists countries with reforms on women empowerment  

The World Bank has approved the sum of $750 million as a loan to Nigeria’s power sector after years of negotiations over long term reforms in the sector.

The loan which was approved by the board of directors of the Bretton wood Institution, was for Power Sector Recovery Operation (PSRO) to improve the reliability of electricity supply, achieve financial and fiscal sustainability, and enhance accountability in the power sector in Nigeria.

This was disclosed in a press release by the World Bank on Tuesday, June 23, 2020.

In the statement, the World Bank noted that about 47% of Nigerians do not have access to grid electricity, and those who do have access, face regular power cuts. In addition, the economic cost of power shortages in Nigeria is estimated at around $28 billion which is equivalent to 2% of the country’s Gross Domestic Product (GDP).

According to the ease of doing business report 2020, lack of power has been one of the major challenges facing the private sector. Hence, improving power sector performance, particularly in the non-oil sectors of manufacturing and services, will be central to unlocking economic growth post-COVID-19.

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The World Bank Country Director for Nigeria, Shubham Chaudhuri said, “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. 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 amidst the COVID-19 pandemic.”

(READ MORE: Afreximbank re-appoints Nigeria’s Benedict Oramah as president, disburses $30b in 4 years)

The PSRO provides results-based financing to support the implementation of the Government’s Power Sector Recovery Program (PSRP). The PSRP is a comprehensive program to restore the power sector’s financial viability, improve service delivery and reduce its fiscal burden.

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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. This will enable the turnaround of the power sector and increase public awareness about ongoing power sector reforms and performance.

Specifically, the PSRO will ensure that 4,500 MWh/hour of electricity is supplied to the distribution grid by 2022 by strengthening the regulatory, policy, and financing framework. It will also 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.

 

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

1 Comment

1 Comment

  1. Abdullahi bello kaka

    June 24, 2020 at 2:38 pm

    How do you apply for this loan

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Energy

FG to deliver 1 million vehicle conversion to autogas by end of 2021

The FG’s Autogas programme is expected to deliver at least 1 million vehicle conversions by the end of 2021.

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FG to deliver 1 million vehicle conversion to autogas by end of 2021

The Federal Government has revealed that its Autogas programme is expected to deliver at least 1 million vehicle conversions by the end of next year.

The implementation of this programme by the government will herald the clean energy transition for Nigeria and the delivery of cheap transportation.

This was disclosed on Sunday, November 29, 2020, by the Federal Government via tweets on its official Twitter handle.

READ: 25 million Nigerians to pay N4,000 monthly for solar power system

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READ: N75 billion Nigerian Youth Investment Fund to be rolled out before end of October – Minister

The rollout is the culmination of the resolve of President Muhammadu Buhari-led government to deepen domestic usage of natural gas in its various forms. It is also in line with the government’s plan to make gas the first choice source of cheaper and cleaner energy for Nigerians in their personal and industrial use.

(READ MORE: FG gives reasons why it is repackaging its social intervention programmes)

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The government also stated that there will be a commencement of formal dispensing of Autogas (CNG and LPG) products at two NNPC retail stations.

In addition, there will be a handover of CNG-powered mass transport buses to NLC, in fulfilment of the agreement during recent negotiations. This agreement was reached with labour during negotiations and in recognition of the role organized labour plays in the quest to bring relief to ordinary Nigerians.

READ: Cornerstone Insurance Plc projects PAT of N537.4million in Q1 2021

What you should know 

Nairametrics reported in September that the Minister of State for Petroleum Resources, Timipre Sylva revealed that Nigerians can now convert cars using petrol to gas, which is cheaper, with effect from October 2020.

The Department of Petroleum Resources also ordered 9,000 filling stations nationwide to begin the installation of facilities for gas products.

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READ: PIB may be passed by first quarter of 2021 – Sylva

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In October, the Federal Government estimated that the Compressed Natural Gas (CNG) will cost N97 per litre, as it had promised to provide alternatives to the Premium Motor Spirit (PMS), otherwise known as petrol, for poor Nigerians.

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Energy

25 million Nigerians to pay N4,000 monthly for solar power system

25 million Nigerians will be expected to pay about N4,000 monthly over a 3-year period to benefit from the FG’s Solar Power Naija project.

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US-based solar company to invest $300m in Nigeria, 25 million Nigerians to pay N4,000 monthly for solar power system

The Presidency has disclosed that an estimated 25 million Nigerians that will benefit from the Federal Government’s Solar Home Systems which is expected to commence this week will be expected to pay about N4,000 monthly over a 3-year period.

According to a report by the News Agency of Nigeria (NAN), this disclosure was made by the Senior Special Assistant to the Vice President on Media and Publicity, Laolu Akande, through a statement on Sunday titled “25m Nigerians to own 5m solar systems at N4, 000 monthly.”

READ: Ikeja Electric tops with 10.7% approved meter allocation – NERC

While giving further insight into earlier reports that the Federal Government will from next week commence the process of installation of 5 million solar-home systems in underserved and off-grid communities across the country, Akande said the solar programme nicknamed Solar Power Naija, whose installations would start in December, is being implemented by the Rural Electrification Agency.

The Presidential media aide who pointed out that the programme was designed to boost ongoing efforts to fix Nigeria’s energy supply challenge, also said that priority would be given to Nigerians residing in rural areas and urban settlements either under-served or cut off the national grid.

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(READ MORE: World Bank approves $2.2 billion loan for Nigeria)

He said an important aspect of this scheme is the option of outright ownership by beneficiaries at a cost ranging from N1, 500 per week to N4, 000 per month depending on the capacities for the 3 years.

He noted that that the arrangement allows as many as 25 million Nigerians to own personal solar systems in their homes.

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READ: FG delivers 100 KWP Solar Mini-Grid to serve off-grid community in Ogun State

He added that, as indicated in the Economic Sustainability Plan, the 5 million connections initiative is a private sector-led electricity access acceleration scheme to be facilitated by a low-cost loan facility from the Central Bank of Nigeria and implemented by REA.

Akande said, “The programme will include the assembly or manufacturing of components of off-grid solutions to facilitate the growth of the local manufacturing industry. In view of the scale of materials required, solar equipment manufacturers/assemblers will be incentivised to set up facilities in Nigeria, thereby offering additional job opportunities to Nigerians.’’

READ: Nigeria’s inflation rate to moderate by first half of next year

“In addition, installation, servicing, and payment collections are expected to provide thousands of other jobs. In all, at least 250, 000 jobs will be created.”

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Optics: If religiously implemented, this will help provide affordable energy to the under-served Nigerians in rural areas with the objective of improving social, economic, and environmental welfare of 25 million Nigerians while generating jobs, increasing revenues, and import substitution.

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READ: FG set to create at least 5 million jobs for youths in the power sector – Minister of Power 

However, the fear is whether this will go the same way as other government’s programmes or initiatives in the past.

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Energy

Transmission company of Nigeria gives reason for nationwide blackout

Following the current nationwide blackout, TCN has stated that it has started the process of restoration to the national grid.

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The Transmission Company of Nigeria (TCN) has on Sunday announced that the current power blackout in the country was due to multiple trippings.

According to a report by Vanguard, General Manager, Public Affairs, TCN, Ndidi Mbah, who made the announcement through a statement said the company had started the process of restoration to the national grid.

Mbah pointed out that the places that power is yet to be restored were Calabar, Makurdi, Jos, Gombe, Yola, Ugwuaji and Maiduguri axis.

She stated, “The Transmission Company of Nigeria (TCN) regrets to inform electricity consumers nationwide that at 11:25 am today, the nation’s electricity grid experienced multiple trippings, which led to the collapse of the system.’’

“TCN has since commenced grid restoration; power has been successfully restored to every part of the country, except Calabar, Ugwuaji, Markurdi, Jos, Gombe, Yola, and Maiduguri axes. The effort is however ongoing to ensure full restoration nationwide.”

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“We regret the inconvenience this has caused electricity consumers. Investigations would be conducted to establish the immediate and remote cause(s) of the multiple trippings as soon as the grid is fully restored, considering that the grid had been relatively stable in the last couple of months.”

What  you should know

At around 11:25 pm on Sunday, November 29, electricity supply to most parts of the country was disrupted as the national electricity grid experienced multiple trippings.

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