BusinessDay

Nigeria’s Lawmakers yet to pass World Bank’s $500m power grant

The National Assembly is yet to pass the World Bank’s $500 million financing support to improve electricity distribution in Africa’s biggest economy, the bank’s country director for Nigeria, Shubham Chaudhuri has said.

The World Bank had on February 5 2021 approved a $500 million support fund to help boost electricity access by improving the performance of the Electricity Distribution Companies (DISCOs) through a large-scale metering programme.

Responding to questions from BusinessDay concerning the scheme, Chaudhuri said “we can’t begin disbursement or even move with it until the National Assembly approves it”.

He added, “We have to keep running at full speed even though we see a wall, in this case, the wall we see is the National Assembly approval”.

Efforts to get the National Assembly’s response to this statement proved abortive as the Senate spokesperson, Basiru Ajibola and his House of Representatives counterpart, Benjamin Kalu did not pick their calls or respond to text messages sent to their mobile numbers.

The chairman, House Committee on Power, Aliyu Magaji Dau was also not available to respond to questions from BusinessDay about the discussion.

Read Also: World Bank approves $500m to support electricity distribution in Nigeria

Nigeria is the largest economy in sub-Saharan Africa, but limitations in the power sector constrain growth.

The World Bank initiative is expected to ensure that Nigerian DisCos make necessary investments to rehabilitate networks, install electric meters for more accurate customer billing and to improve the 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.

“It’s basically meant to have a results-based and accountability-based financing for discos that are serious about turning around,” Chaudhuri said during a World bank courtesy visit to BusinessDay.

The programme is also expected to reduce the CO2 emissions of the Nigerian power sector by reducing technical losses, increasing energy efficiency, replacing diesel and biomass with grid-electricity, and investing more in on- and off-grid renewable energy.

Hungry for power

An estimated 22 million small-unit generators are in use by Nigerians, and they plug a vital gap in a country that ranks 171 out of 190 nations in terms of access to electricity, according to the World Bank.

Nigeria’s grid has an installed capacity of roughly 12,522 megawatts, but due to poor infrastructure, it is only able to deliver around 4,000 megawatts most days, according to the US Agency for International Development.

As of February, 43 percent of Nigerians still had no access to on-grid electricity, according to the World Bank, and Nigeria loses $26.2bn annually (the equivalent of two percent of its gross domestic product) due to the lack of reliable electricity.

To bridge the gap between supply and demand, Nigerians are forced to generate power in small units from off-grid sources, usually fossil fuel-powered generators.

Along with the financial cost of generators are health and environmental costs. Two out of three generator users in Nigeria complained of hearing impairment, according to data cited in a 2019 report by the Access to Energy Institute (A2EI), a non-profit research and development institute working to advance the use of solar energy in developing countries.

“The noise is delirious,” Bello Ajayi, a businessman who works close to one of the government’s major agencies, told BusinessDay. “Every time a nearby generator goes off, it’s like a part of your soul you never knew was missing returns.”

“Everybody hates them,” he added, “but everybody, including government officials, has one.”

Most Nigerians are aware of more health and environmentally friendly options such as solar energy, but cost, quality, and lack of expertise make implementing them difficult. That is why more investment in solar energy is needed, said Segun Adaju, the president of the Renewable Energy Association of Nigeria.

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