World Bank Group and
the Federal Government of
Nigeria concluded two days
of high-level consultations on
the Power Sector Recovery
Programme (PSRP). The
PSRP is a comprehensive
programme of policy, legal,
regulatory, operational and
financial interventions that
will restore service efficiency
and long-term power sector
viability. The measures that
will be implemented through
2021, are aimed at improving
transparency, service
delivery and re-establishing
investor confidence, and
hence, investment in
the sector. Accelerating
electricity access including
through off-grid public
private partnerships is an
important component of the
PSRP.
The meetings assessed
progress in implementing the
Programme and followed on
similar high-level meetings
that took place in Abuja
in December 2016 and in
Washington during the
2017 World Bank and IMF
Spring Meetings. The Federal
Government of Nigeria
clarified progress made to
date and next steps on key
components of the PSRP.
The Federal Government
has prepared a financing
plan to ensure financial
sustainability of the power
sector and included it in the
Medium-Term Expenditure
Framework and Fiscal
Strategy Paper submitted
to the National Assembly in
October 2017.
The financing plan will
be monitored regularly and
incorporate contingencies
should the sector shortfall
deviate from the base case
assumptions until retail
tariffs are adjusted in line
with improved service
delivery to attain cost
recovery by 2021. The PSRP
envisages measures to
contain costs and carefully
manage contingent liabilities
to ensure cost-reflective
and affordable tariffs. In
this context, it was agreed
that existing generation
infrastructure assets will need
to be optimized before the
sector assumes new financial
obligations that could not
be supported. Furthermore,
least cost planning for the
interconnected grid system
will be institutionalized and
its governance arrangements
elaborated in the PSRP.
The Federal Government

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anticipates that all arms of Government
and the National Assembly will continue
to advance the Programme.
The parties agreed that the process of
“Market Reset”, redefining the revenue
requirement of the sector based on new
performance parameters and detailed
investment plans, will be implemented
rigorously, transparently and in a highly
consultative manner. A communications
campaign has commenced that will
facilitate the participation of all
stakeholders including consumers. The
Market Reset is to be led by the Nigerian
Electricity Regulatory Agency (NERC)
whose independence is recognized by the
Federal Government and which needs to
have sufficient resources with which to
discharge its mandate.

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The World Bank delegation informed
the Federal Government that it was
pleased with progress in implementing
the early actions of the PSRP. The World
Bank is committed to assisting the
Federal Government with Programme
implementation working closely with
the PSRP Implementation Monitoring
Team, which reports directly to the His
Excellency, the Vice-President of Nigeria.
The World Bank will continue the
preparation of the proposed US$ 1 billion
Performance Based Loan (PBL) to support
the Programme. The Federal Government
and the World Bank Group agreed on the
necessary next steps to present the PBL
to the World Bank’s Board of Executive
Directors for their consideration.
“This Administration is fully committed
to implementing the PSRP. We believe
that the PSRP is the clearest pathway to
reform the power sector and its success
is contingent on a strict adherence
to performance and Programme
implementation monitoring which I will
continue to give a priority from my office”
said H.E. Yemi Osinbajo, Vice President
of the Federal Republic of Nigeria”
“The discussions we had with the
Government demonstrated that there is
strong momentum in the power sector
and Government commitment to taking
the critical next steps that will allow us
to present the Performance Based Loan
to our Board of Executive Directors.”
said Riccardo Puliti, World Bank Senior
Director for Energy and Extractive
Industries.

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