Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

The Federal Government has secured a $500 million loan from the World Bank to support reforms in Nigeria’s electricity distribution sector, the Bureau of Public Enterprises (BPE) announced.

The loan is expected to fund improvements in metering, data systems, and technical efficiency of power distribution companies (Discos).

According to BPE, the loan will address “identified gaps” in the operations of the 11 Discos across Nigeria.

These companies have long faced criticism for poor performance, overestimated billing, and inability to provide stable electricity to households and businesses.

Over eight million Nigerians remain unmetered, facing extortionate charges despite a limited power supply.

The loan, officially titled the Distribution Sector Recovery Programme (DISREP), includes two main components.

A $345 million portion will fund improvements from the Discos’ performance plans, while $155 million will be used to buy new customer meters, build data aggregation platforms, and provide technical assistance.

The goal, BPE said, is to reduce energy losses, improve transparency, and increase supply reliability.

While the investment promises long-term gains, it adds to Nigeria’s soaring debt burden, which now exceeds N97 trillion.

The latest borrowing comes at a time when ordinary Nigerians are grappling with rising inflation, fuel price hikes, and the fall of the naira.

Critics argue that more loans, especially in the power sector, have yielded little measurable impact over the years.

The 2013 privatisation of the power sector was meant to unlock private capital and efficiency, but more than a decade later, millions remain in darkness.

Analysts have questioned why the government continues borrowing to support private Discos, instead of enforcing accountability.

“The burden of this loan will fall back on the same citizens still receiving poor power,” said an energy analyst.

Punch reports that BPE outlined a repayment structure prioritising statutory taxes, repayment of CBN loans, market obligations, then the DISREP loan, before any net revenue goes to the Discos.

The structure was approved by NERC and the National Council on Privatisation to reduce default risks.

Regulatory sanctions are expected for non-compliance, though past enforcement has often been weak.

Despite repeated reforms, poor service persists in many areas. From rural towns to major cities, Nigerians still report constant outages, low voltage, and high estimated bills.

Until real improvements reach end users, many see loans like this as more debt with dim returns.

Whether this $500 million finally lights up homes, or deepens Nigeria’s financial crisis remains to be seen.

Legit.ng earlier reported that on March 4, 2025, Nigeria finally surpassed the 6,000MW power generation target set by the federal government.

Even though this came three months after the set deadline of December 2024, it was celebrated as a landmark achievement for the power sector.

However, the Nigerian government has set an ambitious target of generating 8,500MW of electricity by the end of 2026.

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Source: Legit.ng