Nigeria and the World Bank have taken further steps to close out a harmonious deal on a recovery plan to bail out the country’s ailing electricity market.
Accordingly, both the Federal Government of Nigeria and the World Bank Group held a high level consultation meeting to discuss World Bank Group support for the government’s power sector recovery programme during the last Spring Meeting of the World Bank and International Monetary Fund (IMF) in Washington, United States.
The programme was approved by the Federal Executive Council (FEC) on March 22, 2017,
A statement from the World Bank stated that the current status of Nigeria’s power sector was characterised by poor service and lack of liquidity, adding that it was a source of macro-economic imbalances and a binding constraint to the revival of growth for Nigeria.
The Bank thus stated that power sector recovery programme would focus on supporting the implementation of power sector reform, reducing losses in the electricity distribution companies (Discos), enhancing the sector’s financial viability, increasing access to electricity services, and mobilising private sector investment.
It in this regards indicated that a deal on this was imminent and that both parties were committed to seeing it out soon.
The statement quoted the Minister of Power, Works and Housing, Mr. Babatunde Fashola, to have said that: “The approval of the power sector recovery programme by the Federal Executive Council demonstrates that the Federal Government is committed to the sustainable development of the power sector. The implementation of the program is critical to achieving the objectives of the government’s Economic Growth and Recovery Plan.”
Similarly, the Minister of Finance, Mrs. Kemi Adeosun, reportedly said at the meeting that: “There is need for well-designed derisking in order to attract private investors to the sector. All the agencies of government will work in concert to ensure implementation of the power sector recovery program.”
According to the statement, the plan also got a legislative backing with the Senate Committee Chairman on Power, Steel and Metallurgy, Senator Enyinnaya Abaribe allegedly saying that: “The legislative arm of the Nigerian government is fully committed to the successful implementation of the power sector recovery program.”
Also giving further legislative backing to the plan was the Chairman, House of Representatives Committee on Power, Hon. Dan Asuquo, who said: “We will make sure our oversight functions focus on the completion of projects and initiatives that support the effectiveness of the power sector recovery program.”
On the art of the World Bank Group, the statement noted that it congratulated Nigeria on its commitment to the program, and stressed the critical importance of the power sector to Nigeria’s development and for restoring macroeconomic resilience and growth.
The meeting, it explained discussed the action plan set out in the program, as well as indicating the need for strong interagency coordination to ensure that it attains its aims.
“Controlling the cost of electricity supply is a critical element of the recovery program that will require close attention to prioritising investments based on least cost power development investment planning principles,” said the World Bank Senior Director for Energy and Extractive Industries, Riccardo Puliti, in the statement.
Similarly, the statement quoted the Global Director for Infrastructure and Natural Resources at the International Finance Corporation (IFC), Bernard Sheahan, to have said at the meeting that: “A turnaround of the power sector will require the expertise and financing of the private sector.”
Sheahan added that: “This would require continuous improvement in the investment climate in Nigeria and strong communications among stakeholders of the sector reform plan during its implementation.”
Also speaking at the meeting, the Director of Operations at the Multilateral Investment Guarantee Agency (MIGA), Sarvesh Suri, explained that: “A full range of instruments will be deployed to help the government mobilise investments directly from the private sector and through private sector guarantees.”
Accordingly, the World Bank Group also reaffirmed its strong partnership with Nigeria in addressing the challenges in the power sector.
It said it would bring its experience in developing financing solutions and attracting private sector capital in Nigeria, adding that the meeting resulted in agreement on the next steps in developing the World Bank Group’s support, recognising the need for concerted efforts to accelerate its preparation.