By Moses Patience Chat
The World Bank has approved a $750 million loan credit for Nigeria’s Power Sector Recovery Operation in a bid to improve the electricity supply in the country.
The loan with project ID P174622 was approved on June 9, 2023, making it the first World Bank loan approved under the new administration of President Bola Ahmed Tinubu.
In a document published on May 19 titled ‘Nigeria – Power Sector Recovery Performance Based Operation Project: Additional Financing”, it was disclosed that the parent project will end on June 30, 2023.
Also, information obtained by Valuechain revealed that the fresh loan is additional financing for the Power Sector Recovery Performance-Based Operation, which was first approved on June 23, 2020.
According to the Bank, the approval of the loan was necessary to expand Nigeria’s electricity transmission and distribution infrastructure considering the economic cost of power cuts in the country which has resulted in an estimated $28 billion loss.
“The economic cost of power shortages in Nigeria is estimated at around $28 billion – equivalent to 2% of its Gross Domestic Product (GDP).
“Improving power sector performance, particularly in the non-oil sectors of manufacturing and services, will be central to unlocking economic growth post-COVID-19,” the World Bank said in a statement.
Giving his remarks, Nigeria’s World Bank Director, Shubham Chaudhuri, maintained that fluctuating power supply in the country was choking private investment in the country to lift millions of Nigerians out of poverty.
“The lack of reliable power has stifled economic activity and private investment and job creation, which is ultimately what is needed to lift 100 million Nigerians out of poverty,” he said.
Chaudhuri also noted that access to electricity was a major factor that hinders the private sector involvement in the economic progress of the country according to the 2020 Ease of Doing Business report.
He added that the objective of the credit facility was to help turn around the power sector and set it on a fiscally sustainable path.
Established in 1960, the International Development Association (IDA )was set up by World Bank to provide assistance to the world’s poorest countries through grants and low-interest loans for projects that boost economic growth, reduce poverty, and improve poor people’s lives.