The federal government has obtained a $500 million loan from the World Bank to support power distribution companies (DisCos).
According to a statement issued yesterday in Abuja by the Bureau of Public Enterprises, the loan will bridge financial shortages in the distribution segment, which is regarded as the most troublesome in the business.
“This funding supports the Nigerian Distribution Sector Recovery Programme (DISREP), aimed at improving the financial and technical performance of the DisCos.
“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),” the Bureau said in the statement signed by Amina Othman, Head, Public Communications.
It was noted that the $500 million DISREP loan provided concessional financing with better terms than commercial bank loans.
discos are supposed to invest the cash in “critical distribution infrastructure,” reduce ATC&C losses, promote power supply dependability, establish financial sustainability in the electricity sector, and improve transparency and accountability.
“Significant progress has been made in the development of the DISREP Programme,” BPE stated.
The privatisation agency identifies important areas for development as bulk procurement of customer/retail metres and metre data management systems, installation of a Data Aggregation Platform (DAP), enhancing governance and transparency within DisCos, and programme components.
The DISREP loan, specifically the Investment Project Financing (IPF) component, is expected to significantly benefit the Nigerian Electricity Supply Industry (NESI) by closing the metering gap, lowering aggregate technical, collection, and commercial (ATC&C) losses, improving remittances and liquidity for DisCos, improving power supply reliability, and increasing transparency and accountability within DisCos.
