• Thursday, July 25, 2024
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Nigeria loses $26bn annually to power failure – World Bank

Nigeria spent N1.03 trillion on subsidies in 2021, according to data from the Nigerian National Petroleum Corporation (NNPC).

Electricity power failure in Nigeria is taking a huge toll on the country’s economy as an estimated $26.2 billion or N10.1 trillion losses is incurred annually, according to the World Bank.

The World Bank which made this known in a statement on Friday, February 5, announced that it has approved $500 million to support the government of Nigeria in improving its electricity distribution sector.

It said the project will help boost electricity access by improving the performance of the Electricity Distribution Companies (DISCOS) through a large-scale metering program desired by Nigerians for a long time.

The bank also said financial support would be provided to private distribution companies only on achievement of results in terms of access connections, improved financial management and network expansion.

According to the World Bank, 85 million Nigerians, representing 43 percent of the country’s population, don’t have access to grid electricity, making Nigeria the country with the largest energy access deficit in the world.

The 2020 World Bank Doing Business report indicates that Nigeria ranks 171 out of 190 countries in getting electricity, and electricity access is seen as one of the major constraints for the private sector.

World Bank Country Director, Shubham Chaudhuri said, “Improving access and reliability of power is key to reduce poverty and unlocking economic growth in the aftermath of the global COVID-19 pandemic.

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“The operation will help improve the financial viability of the DISCOS and increase revenues for the whole Nigerian power sector, which is critical to save scarce fiscal resources and create jobs by increasing the productivity of private and public enterprises”.

The World Bank assured that the Nigeria Distribution Sector Recovery Program (DISREP) will help improve service quality, as well as the financial and technical performance of distribution companies by providing financing based on performance and reduction of losses.

This project, it noted, will complement the support provided under the Power Sector Recovery Operation (PSRO) approved in June 2020. It will ensure that distribution companies make necessary investments to rehabilitate networks, install electric meters for more accurate customer billing and to improve quality of service for those already connected to the grid. It will also help strengthen the financial and technical management of DISCOS to improve the transparency and accountability of the distribution sector.