World Bank has approved a $750 million loan through the International Development Association (IDA) to improve the reliability of electricity supply in Nigeria.
In a statement on Tuesday, the World Bank said the loan is for the Power Sector Recovery Operation (PSRO) to achieve financial sustainability and enhance accountability in the sector.
According to the World Bank, about 47% of Nigerians do not have access to grid electricity and those who do, face regular power cuts.
Therefore, the PSRO will ensure that 4,500 MWh/hour of electricity is supplied to the distribution grid by 2022.
World Bank also estimated that the economic cost of power shortages in Nigeria is $28 billion, equivalent to 2% of the country’s gross domestic product (GDP).
World Bank country director for Nigeria, Shubham Chaudhuri, in a statement said an improved supply of electricity will lift at least 100 million Nigerians out of poverty.
The statement reads in part;
The lack of reliable power has stifled economic activity and private investment and job creation, which 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 amidst the COVID-19 pandemic.
The PSRO provides results-based financing to support the implementation of the Power Sector Recovery Programme (PSRP).
World Bank stressed that getting access to electricity is one of the major constraints for the private sector, according to the Ease of Doing Business report.
It added that improving power sector performance, particularly in the non-oil sectors of manufacturing and services, would be central to unlocking economic growth post COVID-19.
