FG Secures $500M World Bank Loan to Support Electricity Distribution Sector

The Federal Government of Nigeria has secured a $500 million loan from the World Bank to bolster the operations of electricity Distribution Companies (DisCos). This funding aims to address significant financial gaps in the distribution sector, identified as one of the most challenging areas within the country’s electricity industry.

In a statement issued yesterday in Abuja, the Bureau of Public Enterprises (BPE) emphasized that the loan will support the Nigerian Distribution Sector Recovery Program (DISREP). The program is designed to enhance the financial and technical performance of DisCos through targeted capital investments and the financing of key components of their Performance Improvement Plans (PIPs), which have been approved by the Nigerian Electricity Regulatory Commission (NERC).

“This funding supports the Nigerian Distribution Sector Recovery Program (DISREP) aimed at improving the financial and technical performance of the DisCos,” stated Amina Othman, Head of Public Communications at BPE.

The $500 million DISREP loan offers concessional financing, providing more favorable terms compared to commercial bank loans. DisCos are expected to invest these funds in critical distribution infrastructure to reduce Aggregate Technical, Collection, and Commercial (ATC&C) losses, enhance power supply reliability, achieve financial sustainability, and improve transparency and accountability in their operations.

The BPE highlighted significant progress in the preparation of the DISREP Programme, including key initiatives such as the bulk procurement of customer/retail meters, implementation of a Data Aggregation Platform (DAP), and strengthening governance and transparency within DisCos.

The Investment Project Financing (IPF) component of the DISREP loan is projected to significantly benefit the Nigerian Electricity Supply Industry (NESI) by closing the metering gap, reducing ATC&C losses, improving remittances and liquidity for DisCos, enhancing the reliability of power supply, and increasing overall transparency and accountability within the sector.