Nigeria looks to World Bank for $50m loan for power sector reforms

In a move aimed at bolstering its ongoing power sector reforms, the Nigerian government has requested a $50 million loan from the World Bank.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun spoke on the initiative when he met with a World Bank delegate on Monday in Abuja.
The team was led by the Country Director for Nigeria, Dr. Ndiamé Diop while the Special Adviser to the President on Energy, Ms. Olu Verheijen was in attendance.
A statement signed by the Director of Information and Public Relations, Finance Ministry, Mohammed Manga, said the meeting was held to discuss innovative ways to drive Nigeria’s power sector forward.
The statement read, “In its renewed determination to drive economic growth and development in the country, the Federal Government has continued to engage with relevant stakeholders to boost power sector investments as a major priority area for achieving the desired objective.
“The initiative will strengthen plans to roll out 3.5 million prepaid metres to enhance power distribution.
“$50 million funding for state solar plant pilots and infrastructure upgrades, with measures to support tariff frameworks, market reforms, and co-financing the Transmission Company of Nigeria’s Performance Improvement Plan.
“This collaboration aims at strengthening Nigeria’s power sector, enhancing energy access, promoting economic growth and development, improving job creation as well as poverty alleviation in line with the Renewed Hope Agenda of the present administration,” the statement added.
The loan, if approved, would be used to support several key initiatives, including:
• Solar Power Pilot Projects: The funds would be used to establish pilot projects for solar power plants across various Nigerian states. This could help assess the viability of solar energy as a large-scale power generation source in the country.
• Prepaid Meter Rollout: A significant portion of the loan would go towards the rollout of 3.5 million prepaid meters. Prepaid meters offer greater transparency and control over electricity consumption for both consumers and power companies.
• Infrastructure Upgrades: The loan would also be used to finance upgrades to existing power infrastructure. This could involve improvements to transmission and distribution networks, leading to reduced power losses and improved grid stability.
Challenges and Opportunities
Nigeria’s power sector faces significant challenges, including a lack of generation capacity, inadequate transmission infrastructure, and high energy losses. These factors contribute to frequent power outages and hinder economic development.
The proposed World Bank loan presents an opportunity to address some of these challenges. Solar power projects could help diversify Nigeria’s energy mix and reduce dependence on fossil fuels. Prepaid meters can improve revenue collection for electricity companies, allowing them to invest in infrastructure upgrades.
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