World Bank Approves $750m for Nigeria to Plug $28b Worth of Power Shortages

Nigeria’s Economic Cost of Power Shortages Estimates at $28b

In an effort to ensure that more Nigerians have access to the power grid, the World Bank has approved a $750 million International Development Association facility for Nigeria’s Power Sector Recovery Operation.

In the statement released by the multilateral institution on Wednesday, the bank said 47 percent of Nigerians do not have access to the power grid and even the remaining 53 percent who do face regular power cuts.

Shubham Chaudhuri, the World Bank Country Director for Nigeria, who was quoted in the statement said the money would help Africa’s largest economy improve power supply.

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 statement read in part, “Lack of reliable power has stifled economic activity and private investment and job creation.

”This 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 amid the COVID-19 pandemic.

“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 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. It will also 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.”