The Federal Government has secured $500million loan from the World Bank to improve electricity Distribution Companies (DisCos) performance.
This was disclosed in a press statement issued yesterday by the Bureau of Public Enterprises (BPE)’s Head, Public Communication, Amina Tukur Othman.
She said, approved on February 4, 2021, by the World Bank Board of Directors, this funding supports the Nigerian Distribution Sector Recovery Program (DISREP) aimed at improving the financial and technical performance of the DisCos.
The Distribution Sector Recovery Programme, (DISREP), said the Head of Public Communications, 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).
She said the key areas of improvement include: Bulk procurement of customer/retail meters and meter data management systems; Implementation of a Data Aggregation Platform (DAP); Strengthening governance and transparency within the DisCos, and Program Components, amongst others.
The spokesperson said to ensure repayment assurance, the BPE sought and obtained approval from the Nigerian Electricity Regulatory Commission, (NERC), and the National Council on Privatisation, (NCP), for a structured repayment hierarchy.
It added that this structure prioritises payments as follows: Statutory Payments (Taxes); repayment of CBN market loans; Market obligations, repayment of DISREP loan; and DisCos’ net revenue.
BPE said this structured repayment plan aims to mitigate risks associated with repayment uncertainty and defaults, with regulatory sanctions imposed for any defaults.
