World Bank boosts Nigeria’s PSRP with $1bn

By Benjamin Umuteme

Abuja

The World Bank has said it has proposed $1 billion Performance Based Loan (PBL) to support Nigeria’s Power Sector Recovery Programme.
Making the disclosure after a two-day high level meeting between the Bank and the federal government in Abuja yesterday, World Bank Country Director for Nigeria, Rachid Benmessaoud, said the Bank would continue to support government’s effort to address the challenges confronting the power sector.
“The Bank recognizes the critical importance of the power sector to private sector financing and investment and we will continue supporting the Government’s effort to implementing its Power Sector Recovery Programme, thereby de-risking the sector for much needed private capital.”
The Nigeria office of the Bank is expected to present the PBL to the World Bank’s Board of Executive Directors for their consideration.
The PSRP is a comprehensive programme of policy, legal, regulatory, operational and financial interventions that will restore service efficiency and long-term power sector viability.
The measures that will be implemented through 2021, are aimed at improving transparency, service delivery and re-establishing investor confidence, and hence, investment in the sector. Accelerating electricity access including through off-grid public private partnerships is an important component of the PSRP.
At the meeting, the federal government clarified the progress it has so far made and next steps on key components of the PSRP.
The PSRP envisages measures to contain costs and carefully manage contingent liabilities to ensure cost-reflective and affordable tariffs. In this context, it was agreed that existing generation infrastructure assets will need to be optimized before the sector assumes new financial obligations that could not be supported.
Furthermore, least cost planning for the interconnected grid system will be institutionalized and its governance arrangements elaborated in the PSRP.
The financing plan will be monitored regularly and incorporate contingencies should the sector shortfall deviate from the base case assumptions until retail tariffs are adjusted in line with improved service delivery to attain cost recovery by 2021.
in his remark, Vice President, Yemi Osinbajo, assured that the present administration is focused on making the sector work as it presents the quickest path to economic growth.
“This Administration is fully committed to implementing the PSRP. We believe that the PSRP is the clearest pathway to reform the power sector and its success is contingent on a strict adherence to performance and Programme implementation monitoring which I will continue to give a priority from my office.”
“It (PSRP) is an intervention that we have been working on in collaboration with the Federal Ministry of Power, Works and Housing and the World Bank. We are very confident that this laudable and vital Programme will make a fundamental difference in the economy in particular and the country in general.” said Mrs. Kemi Adeosun, Minister of Finance.
This is even as the Minister for Power, Works and Housing, Babatunde Fashola, “The Federal Government is committed to addressing the challenges in the power sector as part of its efforts towards achieving economic recovery and accelerating growth,” said

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