The World Bank has said that it would start the disbursement of the $750 million it approved for Nigeria’s Power Sector Recovery Programme (PSRP) next year and complete the exercise in 2023.
Nigeria’s Power Sector Recovery Programme is designed to improve the reliability of electricity supply, financial sustainability, as well as enhance accountability in the country’s power sector.
The World Bank said in a recent document that it would not pay out any money from the fund in 2020.
According to the programme, it would start disbursement in 2021 with $426 million, while the sum of $162 million would be disbursed each in 2022 and 2023 respectively, to bring the total to $750 million.
With the government’s revenue projected to drop by three per cent of the country’s Gross Domestic Product (GDP) or more in 2020, the World Bank said it is expected that Nigeria would experience some fiscal pressure, necessitating urgent reforms in its power sector.
It said also that the programme would help the government redirect large fiscal resources from regressive power tariffs subsidies towards critical crisis-responsive and pro-poor expenditures.
The multilateral institution said in 2019, Nigeria’s electricity tariff shortfalls reached N524 billion or $1.72 billion, equivalent to 0.4% of her GDP and more than N428 billion spent on health care delivery.
“The federal government financing gap in 2020 is currently estimated at $8.1 billion and it would increase by $1.0 billion in the absence of implementation of Power Sector Recovery Programme (PSRP) and Power Sector Recovery Operation (PSRO).
SOURCE: orientenergyreview.com