The Federal Government has secured a $500 million loan from the World Bank to help improve the performance of Nigeria’s 76 electricity distribution companies (DisCos), as announced by the Bureau of Public Enterprises (BPE).
This funding, approved by the World Bank Board of Directors, will support the Nigerian Distribution Sector Recovery Program (DISREP). The program aims to enhance the financial and technical operations of the DisCos through capital investments and funding for key components of their Performance Improvement Plans (PIPs), which have been approved by the Nigerian Electricity Regulatory Commission (NERC).
According to a statement by Norninari Deezua, Program Officer and Public Communication Stakeholder and External Relations of BPE, the loan will be used mainly to improve areas such as: bulk procurement of customer and retail meters, meter data management systems, implementation of a Data Aggregation Platform (DAP), and strengthening governance and transparency within the DisCos.
The DISREP has two main components:
- Program for Results (PforR): Allocating $345 million to support selected PIP components, managed by the Bureau of Public Enterprises (BPE).
2. Investment Project Financing (IPF): Allocating $155 million to finance meter procurement, the Data Aggregation Platform, and provide technical assistance.
This loan, particularly the IPF component, is expected to significantly benefit the Nigerian Electricity Supply Industry (NESI) by closing the metering gap, reducing technical and commercial losses, improving remittances and liquidity for the DisCos, enhancing power supply reliability, and increasing transparency and accountability within the DisCos.
The statement noted several key milestones achieved in preparing the DISREP Program, including approval by the Federal Executive Council (FEC) on August 3, 2022, execution of the Financing Agreement by the Federal Ministry of Finance, Budget and National Planning and the World Bank, adoption of the Program Operations Manual (POM) by BPE and TCN, obtaining Legal Opinion from the Attorney-General of the Federation, execution of the Subsidiary Loan Agreement, effective declaration of the DISREP Program on January 31, 2023, and inauguration of the DISREP Technical Committee on May 16, 2024.
