The federal government has secured a $500 million loan from the World Bank to address the identified gaps in Nigeria’s Electricity Distribution Companies (DisCos).
The funding is earmarked to support the Nigerian Distribution Sector Recovery Programme aimed at improving the financial and technical performance of the DisCos, the Bureau of Public Enterprises (NPE) as contained in a statement.
The DISREP is designed to enhance the financial and technical operations of the DisCos through capital investment and the financing of key components of their Performance Improvement Plans (PIPs), which have been approved by the Nigerian Electricity Regulatory Commission (NERC).
Key areas of improvement include bulk procurement of customer/retail meters and meter data management systems; implementation of a Data Aggregation Platform (DAP); and strengthening governance and transparency within the DisCos.
“The Purpose is to finance the procurement of meters, a data aggregation platform, and technical assistance,” BPE said in a statement on Thursday.
The DISREP loan, particularly the Investment Project Financing (IPF) component, is expected to significantly benefit the Nigerian Electricity Supply Industry (NESI) by closing the metering gap, reducing Aggregate technical, Collection, and Commercial (ATC&C) losses, improving remittances and liquidity for the DisCos and enhancing the reliability of power supply BPE said the $500 million DISREP loan from the World bank offers concessional financing with more favourable terms than commercial bank loans. This will enable the DisCos to invest in critical distribution infrastructure, improve ATC&C losses, increase power supply reliability and achieve financial sustainability in the power sector among others.
