The bank, in statement in Abuja on Wednesday, said that the
target was to also achieve financial and fiscal sustainability and enhance
accountability in Nigeria’s power sector.
It explained that about 47 per cent of Nigerians did not
have access to grid electricity and those who had access, faced regular power
cuts.
According to the bank, the economic cost of power shortages
in Nigeria is estimated at around $28 billion, which is equivalent to two per
cent of its Gross Domestic Product (GDP).
It stated that getting access to electricity was 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.
The statement quoted Shubham Chaudhuri, World Bank Country
Director for Nigeria, as saying “lack of reliable power has stifled economic
activity and private investment and job creation.
”This 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 amid the COVID-19 pandemic.”
The bank said that PSRO would provide results-based
financing to support the implementation of the Government’s Power Sector
Recovery Programme (PSRP).
It further explained that the PSRP was a comprehensive
programme to restore the power sector’s financial viability, improve service
delivery and reduce its fiscal burden.
“The PSRO is expected to increase annual electricity
supplied to the distribution grid, enhance power sector financial viability
while reducing annual tariff shortfalls and protecting the poor from the impact
of tariff adjustments.
“This will enable the turnaround of power sector while
helping the Federal Government to redirect large fiscal resources from highly
regressive tariff shortfall financing towards critical crisis-responsive and
pro-poor expenditures. It will also increase public awareness about ongoing
power sector reforms and performance.
“Specifically, the PSRO will ensure that 4,500 mwh/hour of
electricity is supplied to the distribution grid by 2022 by strengthening the
regulatory, policy and financing framework.
“It will also enhance the accountability and financial
viability of the sector, helping the sector create a track record of
sustainable operation necessary for unlocking much needed private investments
in the future,” the Bank explained.
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