Views Article – Sharenet Wealth

Africa, News

World Bank approves $750 mln loan for Nigeria’s power sector

(Adds details)

ABUJA, June 24 (Reuters) – 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, it said.

Nigeria’s decrepit power sector has hobbled the growth of Africa’s largest economy for decades.

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.

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.

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.

The World Bank said the aim of the loan was to help Nigeria move away from “from highly regressive tariff shortfall financing”.

The lender often requires reforms to release funds, but it did not say whether any conditions were tied to the money or future tranches. (Reporting by Paul Carsten; Editing by Jason Neely and Jan Harvey)

© 2019 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.