Home Electricity FG plans to get $500 million World Bank loan for power sector

FG plans to get $500 million World Bank loan for power sector

62
0

As part of plans to overhaul the management and operations of power Distribution Companies (DISCOs), the Federal Government is set to draw down on a $500 million World Bank loan, to overhaul the country’s power sector.

In July 2022, the Federal Government sacked the management of six DisCos and appointed new management to oversea their opeartions.

Already, the Central Bank of Nigeria (CBN), the Bureau of Public Enterprises (BPE) and some lender banks controlling about 60 percent of the power companies have been handed six months to one year deadline to get new investors to run the firms.

Minister of Power, Abubakar Aliyu, who disclosed these at the PMB scorecard series in Abuja, yesterday, also added that government can no longer subsidise the electricity sector.

“When I said we have restructured the DisCos, it’s just saying that mildly…restructuring means that we have sacked the core investors, we have sacked the management, to allow the lender to take over.

“It is not AMCON that is holding the franchise, which we’ve been unable to do for a very long time… The 60 percent borrowed from either the Central Bank, the banks have taken over the 60 percent ownership. We’ve allowed the banks, the BPE and the CBN to take control.

“The lenders have provided the chairmanship of the DisCos, the BPE provided part of the management (the managing directors, etc) and the CBN provided the chief financial officers… So, this is the position where we are now; with the six DisCos-Abuja, Kano, Kaduna, Benin, Ibadan and Port Harcourt.

“One may ask, ‘why only the six, what about the rest?’ Three, out of the 11, are performing well; that is, two in Lagos, one in ..they are not doing badly.

“That of Jos was concessioned in 2022 and Yola was re-concessioned last year and they are working very hard to improve. In a way, we have restructured the 11 DisCos; one way or the other.

“Now, it is to help them since we’ve made them more responsible. Now, we are trying to help them get on their feet, to strengthen them with a loan of $500 million, which initially, we refused to take because of their situation. We don’t trust the way things were being handled then. So, the loan has been there, provided by the World Bank, since last year. We didn’t access the loan until we were able to restructure and even now, Mr. President has approved, through the Federal Executive Council, the DISREP; there are some conditions tied to it, so that we can remove the risks.

“This is the situation…They are not doing the best they are supposed to do. That was why we have done what we did…

“Banks are not in the business of providing electricity. So, we have given them six months to one year to find someone serious, to sell the 60 percent to them; those in the business of electricity.”

LEAVE A REPLY

Please enter your comment!
Please enter your name here