The Nigeria Distribution Sector Recovery Programme (DISREP), a $500 million initiative backed by the World Bank, has encountered significant delays, hindering its objective of revitalizing the country’s struggling electricity distribution sector. Approved in February 2021, the program aims to improve the financial and technical performance of Nigeria’s Distribution Companies (DisCos), address the substantial metering gap, rehabilitate critical distribution infrastructure, and strengthen overall governance within the sector. The program’s structure is a hybrid model, incorporating a $345 million Programme-for-Results (PforR) component and a $155 million Investment Project Financing component. However, a combination of legal challenges, legislative delays, and coordination difficulties has hampered its progress, jeopardizing the timely delivery of its intended benefits.
A key obstacle has been a legal dispute initiated by the Association of Meter Manufacturers of Nigeria (AMMON) in April 2023. AMMON contested the International Competitive Bidding (ICB) process adopted by the Federal Government for the procurement of smart meters, arguing that it unfairly excluded local manufacturers. While the case was eventually discontinued in August 2023, the several months of legal proceedings significantly delayed the procurement of 1.44 million smart meters, exacerbating the existing metering gap, estimated at seven million unmetered customers nationwide. This delay has further compounded revenue losses and operational inefficiencies within the electricity distribution network. The government’s rationale for using the ICB process was to secure the most competitive pricing for smart meters, maximizing the number of units procured within the allocated budget.
Further complicating the program’s implementation were delays at the National Assembly. Despite World Bank Board approval in February 2021, the Federal Executive Council struggled to reach a consensus on key aspects of the DISREP, particularly regarding the extension of loans to privately-owned DisCos, whose performance has been consistently subpar since their privatization in 2013. This internal debate within the government extended the approval process for over three years, with the Nigerian Senate finally approving the External Borrowing Plan for DISREP in May 2024. While this approval paved the way for contract signing for meter procurement and the disbursement of PforR funds, the protracted legislative process had already significantly impacted the program’s timeline.
Coordination challenges among various stakeholders also contributed to the delays. The Bureau of Public Enterprise (BPE), responsible for overseeing the program, encountered difficulties securing consistent buy-in from all the DisCos. Varying levels of commitment and capacity among the DisCos to implement the necessary reforms added complexity to the coordination efforts, further slowing down the overall implementation process. The World Bank, in its Implementation Status and Results Report dated June 21, 2024, rated both the overall implementation progress and progress towards achieving the Program Development Objectives as “Moderately Unsatisfactory,” highlighting the significant challenges faced by the DISREP.
Despite these setbacks, some progress has been made. Following the resolution of the legal challenge and the National Assembly’s approval, contracts for the procurement of 1.44 million smart meters were signed in August 2024. An additional 217,000 meters were also procured through a limited domestic process. These meters are expected to contribute towards closing the metering gap and reducing losses within the sector. Furthermore, the implementation of Management Information Systems (MIS) across the DisCos, including Geographic Information Systems, Customer Management Systems, Outage Management Systems, and Enterprise Resource Planning systems, is underway, although full implementation is not anticipated until 2027 due to ongoing political and institutional hurdles.
In response to these delays, the Federal Government has requested a 23-month extension from the World Bank, shifting the program’s closing date to June 2028. This extension aims to provide the DisCos with adequate time to utilize the allocated funds effectively and implement the necessary investments to improve their performance. Concurrent with the DISREP, the government has also launched the Presidential Metering Initiative (PMI), allocating N700 billion (approximately $900 million USD at current exchange rates) for the distribution of free electricity meters to address the metering gap. This initiative, coupled with the DISREP, signals the government’s commitment to addressing critical challenges within the electricity distribution sector and ultimately improving electricity access and reliability for Nigerian consumers.
