The World Bank has approved a $750 million loan for Nigeria’s power sector, the first release of funds after years of stalled talks over long-term reforms.
The World Bank said the aim of the loan was to help Nigeria move away “from highly regressive tariff shortfall financing.”
The loan will cut tariff shortfalls, protect the poor from price adjustments, and increase power supplied to the grid, the World Bank said in a statement late on Tuesday.
The lender often requires reforms to release funds, but it did not say whether any conditions were tied to the money or future tranches.
Nigeria’s antiquated power sector has for decades been a key hindrance to the country’s economic growth.
Problems include decaying infrastructure, mounting debts, low tariffs for electricity and a dilapidated government-owned grid that would collapse if all the country’s power generators operated at full tilt.
Nigeria’s low tariffs, imposed by the government, have forced the Central Bank to spend billions of dollars making up the difference owed by power distributors to companies generating electricity.
In another development, the Nigerian Governors’ Forum (NGF) and the Nigeria Centre for Disease Control (NCDC) has signed N3.7 billion Memorandum of Understanding (MoU) on the World Bank COVID-19 response support to states and the Federal Capital Territory (FCT).
The MoU was jointly signed by the Chairman of the NGF, Dr. Kayode Fayemi and Director General of NCDC, Dr. Chikwe Ihekweazu.
According to Ihekweazu, each of the 36 states of the country and Abuja would receive N100 million from the fund, which would be paid directly to a dedicated account of each state government, after meeting the necessary requirements.
The fund, he added, “is to prevent, detect, and response to threat posed by COVID-19 at the state-level in Nigeria.”
The DG disclosed that since last year the centre had decided to focus on the development of health facilities at the state level.
“Even before this outbreak our strategic direction in NCDC was to support the state to build health facilities.
“We did not know where we will get the resources from and we did not know we will be confronted with an outbreak of this extent,” he explained.
He added that with the outbreak of coronavirus, there is the need to invest in the nation’s health sector, not just at the federal level but at both states and even local government levels.
Ihekweazu pledged to accelerate the process of ensuring that states access the fund to make sure that they respond to COVID-19 outbreak.
NGF Chairman, Fayemi, believed that the funds would be of great assistance to the states in combatting the coronavirus pandemic.
“For us what is critical is not just to see the end to this pandemic, if there can be end.
“However, what is more important to us is that we do not waste this chances, but to use it to build the health infrastructure all over the 36 states,” the governor added.
The fund was part of Regional Surveillance System Enhancement (REDISSE) project to accelerate the development of the state health facilities.
RESDISSE Project Coordinator, Kemi Ladedeinde, disclosed that 34 states have submitted their prioritise plan for the N100 million.
The three states yet to submit the plan, according to Ladedeinde, are Lagos, Yobe and the FCT.