Federal Government has secured a $500 million loan from the World Bank to address the problems faced by the 76 Distribution Companies (DisCos), the Bureau of Public Enterprises (BPE) has announced.
The funding approved by the World Bank Board of Directors, supports the Nigerian Distribution Sector Recovery Program (DISREP} aimed at improving the financial and technical performance of the DisCos.
The Distribution Sector Recovery Program (DISREP) is designed to enhance the financial and technical operations of the DsCos 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).
According to a statement signed by Norninari Deezua, the Programme Officer and Public Communication Stakeholder and External Relations of BPE, the key areas where the loan would be largely deployed for improvement include: Bulk procurement of customer/retail meters and meter data management systems; Implementation of a Data Aggregation Platform (DAP); Strengthening governance and transparency within the DisCos; and Program Components.
Deezua stated that the DISREP comprises two main components: Program for Results (Pfork): Allocation: $345 million, Purpose: Support the implementation of selected PIP components and Implementatiion: Bureau of Public Enterprises (BPE}, Investment Project Financing (IPF): Allocation: $155 million.
He said the Purpose is to finance the procurement of meters, a Data Aggregation Platform, and Technical Assistance.
The DISREP loan, especially 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, enhancing the reliability of power supply, and increasing transparency and accountability within the DisCos.
The statement reads in part; “Significant progress has been made in the preparation of the DISREP Program, with several key milestones achieved, and approval by the Federal Executive Council (FEC) on August 3, 2022. execution of the Financing Agreement by the Federal Ministry of Finance, Budget and National Planning. and the World Bank, adoption of the Program Operations Manual (POM) by BPE and TCN. obtained Legal Opinion from the Attorney-General of the Federation. Execution of the Subsidiary Loan Agreement, effective declaration of the DISREP Program on January 31, 2023, inauguration of the DISREP Technical Committee on May 16, 2024.”
